§ Mr. RentonQ 4. asked the Prime Minister whether she will consider means of removing viable capital expenditure by the public sector from the public sector borrowing requirement.
§ The Prime MinisterWhether borrowing adds to the PSBR—which is of course financed from private funds—depends on whether a body is in or out of the public sector. Since 1971 the real return on total nationalised industry investment has never been above zero. In some industries, notably coal, steel and rail, returns over the period have been significantly worse.
Nevertheless, as the Chancellor has made clear on several occasions the Government are attracted to the idea of allowing nationalised industries to borrow direct from the market, provided certain conditions can be met.
I refer my hon. Friend to the Chief Secretary's speech on 8 December on State industry finance and private capital, which examines the questions involved. Copies have been placed in the Library of the House.