When did this country last have a surplus which represented such a high percentage of GDP? Does
my right hon. Friend agree that such a surplus reflects a tight fiscal stance? Does he agree also that the surplus belongs to the taxpayer? Even if financial prudence prevents him returning it in the next Budget, it will eventually be used to reduce the burden on the taxpayer.
I am grateful to my hon. Friend. I cannot tell him when a British Government last enjoyed a budget surplus—a public sector debt repayment of this scale, but one would have to go back a very long time indeed. As for the claims on that surplus, I am sure my hon. Friend will agree with me that progress in tax reduction needs to be accompanied by progress in debt repayment, and the balance between these two in each particular year is a matter to which I shall give very careful consideration.
Is one reason for the surplus the fact that the Treasury has saved £4 billion a year from the decision to break the link between pensions and earnings and prices? Would it be an excellent use of the budget surplus to give that £4 billion a year back to those who badly need it?
We have, as the hon. Lady knows, increased public expenditure very substantially. The increase, for example, which I announced in the Autumn Statement in November for the National Health Service was far and away the biggest increase that the Health Service has ever received. We have, like any other Government, to decide what our priorities are within public expenditure. We have decided that it is absolutely right that pensioners should enjoy price protection. Beyond that, we have decided to give extra help to the poorest pensioners so that we can then give a great deal more to the Health Service and other public expenditure priorities.
Is it the case that, if my right hon. Friend were borrowing at the same rate as borrowing took place when the Labour party was in power, this year's public sector borrowing requirement would be £40 billion? Will my right hon. Friend persevere in doing good and continue with his excellent policy of repaying debt?
My hon. Friend is quite right. That is the scale, and indeed if we were to go back to that particular Labour Government tombstone of a £40 billion public sector borrowing requirement, I could abolish the whole of income tax and I would not get as big a borrowing requirement as that, but I have to tell the House that I shall not be doing that. [Interruption.] It is a very important source of strength that we have this surplus, and our sound fiscal position, and indeed the transformation, is something that has earned us the respect of the whole world.
I thank the Chancellor of the Exchequer for his generous personal remarks. He was good enough to write to me the day I took ill, and I thank him for that. However, I observe that not much changed while I was away.
Why is the Chancellor still boasting about a public sector surplus, £10 billion of which is made up of asset sales—an exercise in transferring money from the balance sheet to the profit and loss account, which rendered some people in the private sector liable to early arrest—and the other £4 billion of which is from robbing old age pensioners? Why is that something about which he should boast? If he finds that difficult, in a spirit of goodwill towards him, I wish him luck over the next six or seven weeks. I hope that the Prime Minister does not continually seek to express her disagreement with his monetary, fiscal or mortgage policies. Let him hope that he has at least a happy time until Sir Alan Walters returns.
I do not altogether agree with the right hon. and learned Gentleman that nothing has changed. I observe with some envy that he has lost a great deal of weight. But apart from that, nothing at all has changed. He is as entertaining as ever, and as totally devoid of policies.
The House will note with pleasure and satisfaction the healthy public expenditure surplus, but will my right hon. Friend acknowledge that millions of British taxpayers wish substantially more money to be spent on infrastructure and will he assure the House that he will view with favour such requests from the Department of Transport?
As my hon. Friend knows, we have a desirable convention that public expenditure decisions are taken and announced in the autumn and that the spring Budget is for judging the level of taxation and the level of borrowing, or, as it is called in the new era in which we live, the level of debt repayment. But I am sure that in that context my hon. Friend will have noted with great satisfaction the substantial increase in expenditure on transport infrastructure, particularly on roads, which I announced in the Autumn Statement in November.