§ Mr. Austin Mitchellasked the Chancellor of the Exchequer if he will explain 154W the reference on page 4 of Economic Progress Report to the effects on the demand for money of continuously rising private sector financial wealth; what is the relationship assumed by the Treasury in assessing the effect of the public sector borrowing rate on interest rates; and if he will circulate in the Official Report a table showing the expected increase in private sector financial wealth in each year to 1983 and its distribution between various sections of the community.
§ Mr. LawsonThe relationship between the public sector borrowing requirement and interest rates will depend on the monetary target which is being pursued by the authorities. It will also depend on the cause of the increase in the PSBR and on expectations. No forecast for the increase in private sector financial wealth up to 1983 is available, but the hon. Member may like to refer to pages 18–19 of the Financial Statement and Budget Report.
§ Mr. Austin Mitchellasked the Chancellor of the Exchequer by how much fixed capital investment has been reduced by the rise in interest rates since May 1979; what further reduction he expects in the next 12 months; and by how much private expenditure has been or is likely to be reduced as a result of the fall in the value of fixed interest assets, having regard in each case to the findings of the Treasury model.
§ Mr. LawsonI am unwilling to commit my Department's resources to carrying out the simulations requested, as they would be costly and would replace other work. The hon. Member may wish, however, to pursue his inquiry via his access to the Treasury's economic model through the Library of the House.