§ Mr. Malcolm BruceTo ask the Chancellor of the Exchequer what is his estimate of(a) the additional tax revenues which would accrue to the Exchequer and (b) the reduction in Government spending, in each of the next five years if the annual rate of growth of gross domestic product in the United Kingdom were 0.25 per cent. per annum higher than assumed in the forecasts contained in the "Financial Statement and Budget Report 1997–98"; and if he will make a statement. [12768]
§ Mr. Jack[holding answer 28 January 1997]: The table shows estimates of the effect on government receipts and spending if the annual rate of growth of GDP were ¼ per cent. per annum higher than forecast in the "Financial Statement and Budget Report 1997–98". These are based upon the estimates set out in HM Treasury occasional paper No.4 "Public Finances and the Cycle". All such estimates are inevitably uncertain.
Per cent. of GDP 1997–98 1998–99 1999–00 2000–01 2001–02 General Government receipts 1— 1— 1— ¼ ¼ General Government expenditure 1— -¼ -¼ -½ -½ 1 Negligible. In both cases, the budget balance continues to improve, and is in surplus by the end of the projection period.