§ Mr. TimmsTo ask the Chancellor of the Exchequer if he will make a statement about the Government's performance against targets in reducing borrowing in 1997–98. [45870]
§ Mrs. LiddellAs a result of the lower than expected outturn in government borrowing in 1997–98, and taking account of the Government's latest forecast for Central Government net borrowing in 1998–99, the Government have reduced their financing requirement to £12.1 billion in 1998–99. This is a reduction of £3.1 billion, compared with previous plans. The revised financing requirement is expected to be met from gilt sales of £11.6 billion, and a net contribution from National Savings of £..; billion. The revised financing arithmetic is set out in the table, followed by revisions to paragraph 4 of the Debt
655WManagement Office remit for 1998–99, and the revised auction calendar for 1998–99. There are no other changes to the Government's plans for debt management, or to the rest of the Debt Management Office remit, as set out in the 1998–99 Debt Management Report.
Central Government Financing Requirement 1998–99 £ billion Central Government net borrowing 0.2 Loans and sales of financial assets 1.9 Accruals adjustments 1.4 Central Government net cash requirement 3.5 Expected net change in official reserves 0.0 Gilt redemptions 16.8 Gilt sales residual from 1997–98 -8.2 Financing requirement 12.1 Less net financing from: National Savings 0.5 Certificates of Tax Deposit 0.0 Treasury bills and other short term debt 0.0 Gross gilt sales required 11.6 of which: Ultra-short conventionals (1–3 years) 0.0 Short conventionals (3–7 years) 2.5 Medium conventionals (7–15 years) 2.5 Long conventionals (over 15 years) 3.1 Index-linked gilts 3.5 Over 1998–99 as a whole, the Debt Management Office will aim to make 30 per cent. of its gilts sales in index-linked stocks, with the remainder in conventional stocks, spread across the maturity ranges. On current forecasts, this implies index-linked gilt sales of £3.5 billion and conventional gilt sales of £8.1 billion. Three auctions of conventional stocks are now scheduled for 1998–99, including the auction already held on 20 May, when the DMO successfully auctioned £3 billion of long stock. The remaining two auctions of conventional stocks will be used to issue short and medium stocks, in broadly even proportions. The Government do not necessarily intend to maintain issuance in each maturity area in these proportions in future years.
Auction calendar 1998–99 Date Wednesday 20 May 1998 Conventional Wednesday 29 July 1998 Conventional Wednesday 28 October 1998 Index-linked Wednesday 27 January 1999 Index-linked Wednesday 24 March 19991 Conventional 1 Subject to Chancellor's decision on the Budgetary timetable