Thus we believe that the next government will attempt to adhere to the spending plans set out in the last FSBR, at least for the next two fiscal years.
The profile for this series is very similar to that shown in the FSBR.(3) But there are a number of features concerning the receipts from individual taxes that are worth commenting on.
The Public Sector Finances [pounds]billion, unless elsewhere specified Financial year 1996-97 1997-98 1998-99 1999-2000 Receipts FSBR 286.2 304.0 320.0 338.0 NIESR 284.9 298.3 313.5 330.8 Current & FSBR 315.7 324.4 331.0 340.0 capital NIESR 316.3 321.6 330.3 341.1 expenditure Privatisation FSBR 3.0 1.3 0.0 -1.0 proceeds etc.
Table B puts together our forecasts for the components of the PSBR and compares them with those shown in the FSBR. Greater detail of our forecast for the public sector finances is shown in table 11.
Table B sets out the projections for public spending as set out in the FSBR
together with the assumptions that underlie this forecast.
According to the Medium Term Financial Strategy (FSBR
, 1994-95 page 15) 'it is the role of monetary policy to deliver low inflation'.
In the medium term the PSBR/GDP ratio in our forecasts is significantly above that in the latest FSBR
, with borrowing stabilising at around 2 per cent of GDP by the end of the decade and the net financial debt of the public sector settling at just over 40 per cent of GDP (general government gross debt is a little under 50 per cent of GDP).
We continue to project slightly smaller deficits than anticipated in the FSBR
, with borrowing forecast to be |pounds~46 billion this year (7.2 per cent of GDP) and |pounds~35.8 in 1994/5 (5.2 per cent of GDP).
Our latest forecasts continue to show borrowing in the current year and in 1993/4 close to that forecast in the Financial Statement and Budget Report (FSBR
In contrast, the latest projections made by the Treasury in the FSBR
show GDP growing by 3 1/2 per cent per annum over the fiscal years 1994/5 to 1996/7 with inflation subsiding to 2 per cent.
As expected, the Budget this year changed little; it was presented along with a sombre account of economic prospects in the FSBR
. Meanwhile local authority expenditure has been increasing faster than expected or intended, financed by the high levels at which the new poll tax has been introduced.
We assume that income taxes will be cut by 3 billion pounds this year and by 2 billion pounds a year subsequently, which is only marginally different from the figures in the FSBR