Public finances Christine Frayne.

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Presentation transcript:

Public finances Christine Frayne

Current budget: total change £billion 2006-07 2007-08 2008-09 2009-10 2010-11 Budget 2006 –7 +1 +7 +10 +12 Higher spending –2½ –3½ –3 –4 Lower North Sea revenue –0 –2 –1 Other revenue changes +0 –4½ –5 Total (no measures) –8½ –5½ +2 Higher trend growth +1½ +3 +4½ +6 PBR measures +2½ Current budget –8 +4 Source: HM Treasury ; IFS

Current budget: total change £billion 2006-07 2007-08 2008-09 2009-10 2010-11 Budget 2006 –7 +1 +7 +10 +12 Higher spending –2½ –3½ –3 –4 Lower North Sea revenue –0 –2 –1 Other revenue changes +0 –4½ –5 Total (no measures) –8½ –5½ +2 Higher trend growth +1½ +3 +4½ +6 PBR measures +2½ Current budget –8 +4 Source: HM Treasury ; IFS

Current budget: total change £billion 2006-07 2007-08 2008-09 2009-10 2010-11 Budget 2006 –7 +1 +7 +10 +12 Higher spending –2½ –3½ –3 –4 Lower North Sea revenue –0 –2 –1 Other revenue changes +0 –4½ –5 Total (no measures) –8½ –5½ +2 Higher trend growth +1½ +3 +4½ +6 PBR measures +2½ Current budget –8 +4 Source: HM Treasury ; IFS

Current budget: total change £billion 2006-07 2007-08 2008-09 2009-10 2010-11 Budget 2006 –7 +1 +7 +10 +12 Higher spending –2½ –3½ –3 –4 Lower North Sea revenue –0 –2 –1 Other revenue changes +0 –4½ –5 Total (no measures) –8½ –5½ +2 Higher trend growth +1½ +3 +4½ +6 PBR measures +2½ Current budget –8 +4 Source: HM Treasury ; IFS

Current budget: total change £billion 2006-07 2007-08 2008-09 2009-10 2010-11 Budget 2006 –7 +1 +7 +10 +12 Higher spending –2½ –3½ –3 –4 Lower North Sea revenue –0 –2 –1 Other revenue changes +0 –4½ –5 Total (no measures) –8½ –5½ +2 Higher trend growth +1½ +3 +4½ +6 PBR measures +2½ Current budget –8 +4 Source: HM Treasury ; IFS

Revenues: new measures £billion 2006–07 2007–08 2008–09 2009–10 Air passenger duty +0.2 +1.0 +1.1 +1.2 Fuel duty –0.2 +0.0 ‘Avoidance’ and other Total +2.2 +2.3 Source: HM Treasury

Current budget: total change £billion 2006-07 2007-08 2008-09 2009-10 2010-11 Budget 2006 –7 +1 +7 +10 +12 Higher spending –2½ –3½ –3 –4 Lower North Sea revenue –0 –2 –1 Other revenue changes +0 –4½ –5 Total (no measures) –8½ –5½ +2 Higher trend growth +1½ +3 +4½ +6 PBR measures +2½ Current budget –8 +4 Source: HM Treasury ; IFS

Structural current budget balances Source: HM Treasury

A seven year cycle? Budget 2005: 1999–00 to 2005–06 Source: HM Treasury

A twelve year cycle? Budget 2005: 1999–00 to 2005–06 Source: HM Treasury

A ten year cycle? Budget 2005: 1999–00 to 2005–06 PBR 2006: 1997–98 to 2006–07? Source: HM Treasury

Current budget balance Current cycle total = 0.6% of GDP or £7.8bn Source: HM Treasury

Current budget balance Next cycle Source: HM Treasury

Monthly current budget surplus Source: ONS ; HM Treasury

Receipts on track Growth in net taxes and social security contributions in 2006–07 Source: HM Treasury

Current spending growth to slow? Growth in central government current spending, (including depreciation) in 2006–07 Source: HM Treasury

Spending in November–March Source: HM Treasury

Spending in November–March Source: HM Treasury

Spending in November–March Source: HM Treasury

Will the investment rule be met? Source: HM Treasury; IFS

Will the investment rule be met? Source: HM Treasury; IFS

Debt could exceed 40% 50/50 chance Source: HM Treasury; IFS