Public Sector Debt

HC Deb 14 February 1989 vol 147 c113W

Mr. Cousins

To ask the Chancellor of the Exchequer if he will estimate the effect on the monetary aggregates of public sector debt repayment in 1988.

Mr. Lilley

The Government's policy is to fund fully the net total of maturing debt, the PSBR and any underlying change in foreign exchange reserves by sales of debt outside the banking and building society sectors. This policy neutralises the impact of the public sector on the monetary system. The progression from public sector borrowing to the net repayment of public sector debt does not affect this. Should the net total be negative "unfunding" is required, that is, the Government make purchases of debt.