Letter: Ground these absurd rules on borrowing

John Perry
Tuesday 24 September 1996 23:02 BST
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Sir: Your report on the possible privatisation of air traffic control (23 September) highlights the absurdity of the public sector borrowing requirement (PSBR) rules.

Here we have a profitable industry which needs to invest to increase its profitability. There is an overwhelming case on safety grounds to keep it in the public sector. Yet PSBR rules dictate that public borrowing is bad for whatever purpose. The only route to raising the required cash is therefore privatisation.

Such a situation would not occur in any other European country, because none of them follow the ridiculous strictures of the PSBR. After all, the economic impact of borrowing to build air traffic control centres is the same whether National Air Traffic Services is a public or private body.

The same problems bedevil other parts of the public sector - the Post Office, municipal airports and council housing - which get most of their revenue from charges for services. Only those hell-bent on justifying privatisation can reject the case for joining our neighbours in adopting more sensible borrowing rules.

JOHN PERRY

Director of Policy

Chartered Institute of Housing

Coventry

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