§ In his excellent Budget in March, my right hon. Friend the Member for Kingston upon Thames (Mr. Lamont)—[Interruption.]—who at this moment is no doubt commenting on my remarks on television, announced a series of tax measures designed to reduce public sector borrowing over the medium term. But necessary and controversial as those measures were, they still left the prospect of a borrowing requirement of over 4 per cent. of GDP by the end of this Parliament. In my judgment, we now need to go further. The first Budget that combines decisions on taxation and spending, a reform instituted by my right hon. Friend, gives me the opportunity to do so.
§ As a prudent Government, we cannot sit by, simply hoping that faster growth and forecasting changes will come to our rescue. As a Government committed to high quality public services, we must prevent ever larger sums being swallowed up in debt interest payments. As a Government with a long-term tax-cutting agenda, we must stop ever more national debt piling up for future generations to pay. As a Government determined to deliver sustained recovery, we must ensure that billions of pounds of the nation's savings are not poured into the public sector—savings that are better used by the private sector, to support investment, expansion and jobs.
§ It may seem easier to take the short-term view, but Britain's recovery can only be sustained if we tackle the deficit now. In my opinion, the Budget must sort out the problem of public borrowing once and for all. The measures I am announcing today will in themselves reduce the public sector borrowing requirement by a further £5½ billion in the next financial year, by £7 billion in 1995-96 and by £10½ billion in 1996-97, equivalent to 1¼ per cent. of GDP by the end of this Parliament.
§ Coming on top of the measures announced by my right hon. Friend in March, these are substantial sums, but, in my judgment, this is the minimum necessary to ensure that the public finances are on a sustainable track for the rest of the decade. It will help to reduce the public sector borrowing requirement from just under £50 billion in the current year to about £38 billion next year. It should 924 eliminate borrowing to finance current spending by 1997-98 and eliminate Government borrowing entirely by the end of the decade.
§ In short, my proposals today should meet their objectives in full—establishing sound public finances into the next century.