Lord Lucasasked Her Majesty's Government:
With reference to the statement in the Labour Party manifesto that "over the economic cycle, we will only borrow to invest", what point in that cycle they consider the United Kingdom has reached; and whether they consider it to be appropriate for borrowing to exceed or fall short of investment at such a point.
§ Lord McIntosh of HaringeyThe Government's fiscal rules are set out in the Financial Statement and Budget Report, July 1997, along with forecasts for the economy and for the public finances. The Treasury's assessment is that the output gap is close to zero, and there is a risk that output could already be above trend. The Government's deficit reduction plan means that 69WA public sector borrowing falls below investment next year and each year thereafter, thereby meeting the golden rule.