HISTORIC PRESS RELEASE : Fiscal Strategy for this Parliament [June 1998]

The press release issued by HM Treasury on 11 June 1998.

The Government’s planned spending totals for the rest of the Parliament were announced today by the Chancellor, Gordon Brown.  The plans lock in, and take forward, the fiscal tightening published in the 1998 Budget and ensure the Government meets its two strict fiscal rules.

The Chancellor said:

“Today I have outlined  the Government’s fiscal strategy for the remainder of this
Parliament through announcing the overall spending plans.

It is only because we have set this tough framework, based on strict control of  current spending, a prudent debt ratio and a fiscal tightening, that it is possible to take the action necessary to reverse the chronic under-investment in our country’s health, education and transport and housing infrastructure, and to re-equip Britain as a modern nation.”

The key features announced today are that:

• real current spending will grow at an average of 2 1/4 per cent a year over the remainder of the Parliament;
• an Investing in Britain Fund will be established to raise public sector net investment towards 1 1/2 per cent of GDP;
• surpluses on the current budget are forecast for the rest of the Parliament;
• the public sector net debt ratio is set to continue to fall to below 40 per cent of GDP by the end of the Parliament; and
• net public sector borrowing is projected to fall by 3 1/2 per cent of GDP over the three
• years between 1996-97 and 1999-00 – the same fiscal tightening as was published in the Budget.