Balance of Payments

Part of the debate – in the House of Commons at 3:31 pm on 27th June 1988.

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Photo of Dennis Skinner Dennis Skinner Member, Labour Party National Executive Committee, Vice-Chair, Labour Party 3:31 pm, 27th June 1988

I beg to ask leave to move the Adjournment of the House under Standing Order No. 20 for the purpose of discussing a specific and important matter that should have urgent consideration, namely, The worst ever balance of payment crisis, which has just been announced for the month of May. You will know, Mr. Speaker, that some of us have been cautioning for some time about the way in which the balance of payments has been worsening since the 1987 election boom. The deficit of £1·2 billion represents the worst figures in Britain's history. While the Prime Minister spends her time gallivanting around the world preaching prosperity and telling other countries that Britain is going through a boom, the truth is that the figures show, as have others during 1988, that the country is bleeding to death.

In this year's Budget, the Chancellor of the Exchequer told us that there would be a balance of payments deficit this year of £4 billion. In the five months to May, we have already had a deficit of £5·2 billion and we are heading for a deficit of between £10 billion and £12 billion. While the Prime Minister is constantly preaching prudence to others, she is presiding over a pawnshop economy. A balance of payments deficit of £12 billion is only the first instalment of having to pay for the so-called free-for-all, entrepreneurial, market force philosophy of the Prime Minister and her Cabinet. Some of our chief competitors, such as West Germany and Japan, have surpluses between them of $120 billion, while Britain's deficit gets even worse. It will get increasingly worse as North sea oil runs out.

The debate is important because interest rates will rise as a result of the deficit and that will bring about further inflation and the spiral of unemployment will continue once again. The figures show that the Government have been fiddling the invisible payments so much so that during 1987 they gave a figure of £600 million to £700 million, and that has now been scaled down to £400 million.