Fifteen months after they began, the authors of Britain's adventure in monetarism are still searching for signs of progress. The latest Treasury statistics are not encouraging. They show that the public sector borrowing requirement (PSBR) -- the money the government needs to borrow to pay its bills -- has been growing far too fast.
In the first quarter of the fiscal year that began in April, the figure touched L4.47 billion ($10.6 billion) -- more than half the L8.5 billion ($20 billion) figure Chancellor of the Exchequer Sir Geoffrey Howe targeted last March as the entire 1980-81 PSBR.
One reason for higher borrowing may be the recent large pay increases won by unions representing the vast web of nationalized industries and civil servants. These awards appear to be higher than those in the private sector, and came in spite of ministerial jawboning about the need for pay restraint. Another reason my be increased spending on defense, in keeping with Prime Minister Margaret Thatcher's hawkish leanings.
Government officials put a brave face on the recent statistics, arguing that the scale of government borrowing will drop later this year for several reasons:
* North Sea oil production, aside from giving Britain a net self-sufficiency in crude oil this year for the first time, is also ssheduled to produce about %: 2.5 billion ($5.9 billion) in petroleum tax later this year.
* Britain's net contribution to the European Community may be reduced by some %:700 million ($1.65 billion) early next year, the result of Mrs. Thatcher's fierce and prolonged battle with her Community partners.
* To the horror of the Labour opposition, the government is unravelling the socialist fabric of the nation by selling off some pieces of nationalized industry -- a move that could bring in another %:500 million ($1.18 billion).
Bur the independent bankers, nevertheless, are predicting that the PSBR may run as high as %:12 billion ($28.3 billion) this year.
Mrs. Thatcher herself has helped focus all eyes on the PSBR. Phrases like "Once we control the money supply" run in refrain throughout her speeches and public comment. Her conviction: Control government borrowing (closely linked to growth in the money supply) and you control inflation, which to her is the nation's principal demon.
In the plan to restore economic health -- which Mrs. Thatcher has insisted will always take time -- the PSBR is a kind of leading domino. When it falls, it should knock down the 16 percent minimum lending rate. That, in turn, will knock down the high interest rates that Britain's industrialists, already hobbled by a strong pound, rising energy costs, and a worldwide recession, are stumbling over as they borrow money to keep in the race.
And when those rates fall, many hope the next thing to fall will be the almost-2-million jobless figure, heralding Britain's rebound into economic recovery.
But the latest PSBR statistics suggest that the dominoes are still standing pretty firm.