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Public Borrowing

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 13th March 1997.

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Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam 12:00 am, 13th March 1997

To ask the Chancellor of the Exchequer what representations he has received from the Chartered Institute of Housing regarding his policy on the level of public borrowing. [18531]

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

The chief executive of the Chartered Institute of Housing wrote to my right hon. and learned Friend on 3 March asking for a large increase in Government spending on housing, and my right hon. and learned Friend will reply shortly.

Photo of Mr Irvine Patnick Mr Irvine Patnick , Sheffield, Hallam

As my right hon. Friend will be aware, some organisations, including the Labour party, advocate the spending of capital receipts. What effect would such spending have not only on the public finances but on cities such as Birmingham and Sheffield?

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

That same chief executive of the Chartered Institute of Housing recently secured what I take to be an unbreakable pledge from Labour that it would release the accumulated receipts of local authorities. On a phased basis, that would probably amount to about £2.5 billion a year of additional net borrowing in the economy. That ends up as nonsense because, as my hon. Friend hints—I suspect that as a former local authority leader he knows—in Birmingham, for example, there are no accumulated receipts. Therefore, there would be no gain at all to Birmingham. In Surrey, there would be huge additional spending. That would be an extremely odd and foolish way to deal with housing policy.

Photo of Mr John Fraser Mr John Fraser , Norwood

Has the Minister made any calculation of the extent to which public expenditure would be reduced by not having to place so many families in private accommodation at exorbitant rents, with 100 per cent. housing benefit?

Photo of Mr William Waldegrave Mr William Waldegrave , Bristol West

Any such calculation, which would be difficult to make, would be dwarfed by the increasing borrowing and spending to which the hon. Gentleman's colleagues on the Labour Front Bench are committed. They have found no answer. They have pledged themselves to an additional minimum £2.5 billion—it might be more—net borrowing.