HM Treasury News Release      

98/98                                   11 June 1998
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             A FISCAL STRATEGY FOR THIS PARLIAMENT

The Government's planned spending totals for the rest of the Parliament were
announced today by the Chancellor, Gordon Brown.  The plans lock in, and take
forward, the fiscal tightening published in the 1998 Budget and ensure the Government
meets its two strict fiscal rules.

The Chancellor said:

  "Today I have outlined  the Government's fiscal strategy for the remainder of this
  Parliament through announcing the overall spending plans. 

  It is only because we have set this tough framework, based on strict control of
  current spending, a prudent debt ratio and a fiscal tightening, that it is possible to
  take the action necessary to reverse the chronic under-investment in our country's
  health, education and transport and housing infrastructure, and to re-equip Britain
  as a modern nation."

The key features announced today are that:
  real current spending will grow at an average of 2 1/4 per cent a year over the
  remainder of the Parliament; 

  an Investing in Britain Fund will be established to raise public sector net investment
  towards 1 1/2 per cent of GDP; 

  surpluses on the current budget are forecast for the rest of the Parliament; 

  the public sector net debt ratio is set to continue to fall to below 40 per cent of GDP
  by the end of the Parliament; and

  net public sector borrowing is projected to fall by 3 1/2 per cent of GDP over the three
  years between 1996-97 and 1999-00 - the same fiscal tightening as was published
  in the Budget.

Notes to Editors

1.     Public sector net investment will double, rising  to about 1 1/2 per cent of GDP by the
       end of the Parliament, whilst the net public sector debt ratio continues to fall.  The
       key fiscal aggregates are set out in the table below.


Key Fiscal Indicators
						Per cent of GDP
				Estimate			Projections

				1997-98	1998-99	1990-00	2000-01	2001-02	

Surplus on current budget	0.0	0.6	0.8	1.1	1.4
Net investment			0.8	0.8	1.0	1.2	1.4
Public sector net borrowing	0.7	0.2	0.2	0.0	0.0


2.     Accompanying the Economic and Fiscal Strategy Report there are six Treasury
       Press Releases 96/98 to 101/98.


If you have access to the Internet you can find this news release at
http://www.hm-treasury.gov.uk.  Other Treasury material can also be found at this
address.


# = pounds sterling