§ Mr. PearsonTo ask the Chancellor of the Exchequer what is the difference in money terms and what has been the percentage change between the PSBR forecast at the time of the 1994 autumn Budget and the 1995 summer economic forecast estimates; and what are the main reasons for the difference. [33116]
§ Mr. Waldegrave[holding answer 11 July 1995]: The summer economic forecast for the PSBR in 1995–96 is £23½ billion. This is £2 billion higher than forecast at the time of the last Budget. As a proportion of GDP, the PSBR is now forecast at 3¼ per cent., ¼ percentage point higher than in the Budget.
The main reason for this increase is the assumption that lower than expected tax receipts seen in 1994–95 will be reflected in the level of receipts in 1995–96. Control total expenditure is assumed to be the same as in the plans announced in the last Budget. The Cabinet has recently confirmed that it is the Government's intention that spending will be no higher than in the plans announced in the Budget, reinforcing the Government's commitment to sound public finances.