Oral question asked in the House of Lords, by Lord Forsyth of Drumlean (Conservative). It was answered on Thursday, 18 December 2008.

Government Borrowing

Question: My Lords, if government borrowing is to rise to these very high levels, can the Minister help me by explaining how that will not result in the crowding out of the private sector? The high levels of public borrowing will make it harder for businesses to get the funds that they need, which is what the Government say they want to achieve.

Answer: My Lords, that question is more relevant to the past decade than to the situation in which we find ourselves. As I am sure the noble Lord will readily appreciate, small and medium-sized businesses, and business as a whole, cannot get investment funds at present because of the credit crunch and the position that our banks are in. That is why the Government have set about the recapitalisation of the banks in order to guarantee that the very problem that the noble Lord has identified is tackled.

Secondary information

Type: Oral question
Reference: 706 c906
Session: 2008-09
Oral question type: Supplementary
Chamber / Committee: House of Lords chamber
Subjects: Central government Borrowing Public sector net cash requirement Per capita costs
Link: View this Oral question on www.publications.parliament.uk