§ Mr. Russell BrownTo ask the Chancellor of the Exchequer if he will make a statement about the Government's borrowing plans. [125981]
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§ Miss Melanie JohnsonIn light of recent developments which have increased cash receipts this financial year by £19.5 billion more than the Budget forecast, the Government are making the following changes to the Debt Management Office's gilt remit for 2000–01.
Quantity of Gilt Sales
The DMO will aim for gilt sales of £10 billion in 2000-01, a reduction of £2.2 billion on previous plans. There will be no further reductions in gilt sales this financial year.
Amount and Maturity Mix of Conventional Gilt Issuance
DMO will hold two further conventional auctions in the long (15 years and over) maturity area. DMO should aim for total conventional gilt sales of £6.5 billion for 2000–01.
Exercise of contingency measures in the Debt Management Report
HM Treasury will accommodate £5.9 billion of the receipts by pre-financing £3.9 billion of foreign currency debt due to mature in 2001–02 and £2.0 billion of foreign currency debt due to mature in 2002–03. This differs from the £5.7 billion figure in the Debt Management Report due to the fall in sterling against the dollar since the Budget.
The planned Treasury Bill stock will also be reduced by £0.7 billion to £8 billion.
Buy-backs of debt
The buy-back programme may be increased later in the year to a maximum of £5 billion. This will be decided at the time of the Pre-Budget Report.
Net short term debt
The remaining proceeds (£10.7 billion before any increase in buy-backs) will be used to reduce net short term debt (the Ways and Means balance, Treasury Bills less short term assets). Given that £10 billion of the proceeds are not expected until later in the year, decisions on the composition of the reduction in net short term debt will also be made at the time of the Pre-Budget Report, also taking into account any revision to the forecast Central Government Net Cash Requirement.
The reduction in net debt will be unwound in 2001–02 and 2002–03, reducing gilt sales during this period.
Gilt auction calendar Date Type 2000 Wednesday 26 July Index-linked Wednesday 25 October1 Index-linked Late November/early December1 Conventional 2001 Wednesday 24 January Index-linked Wednesday 28 March1 Coventional 1 Exact dates subject to confirmation following the Chancellor's decision on the Budgetary timetable.