Public Sector Debt

Treasury written question – answered on 6th September 2013.

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Photo of David Davies David Davies Chair, Welsh Affairs Committee, Chair, Welsh Affairs Committee

To ask the Chancellor of the Exchequer if he will estimate the proportion of tax revenue required to service interest payments on the national debt in each of the next 10 years.

Photo of Sajid Javid Sajid Javid The Economic Secretary to the Treasury

The independent Office for Budget Responsibility (OBR) is responsible for producing the official economic and fiscal forecasts in the UK. In the latest March 2013 Economic and Fiscal outlook, debt interest payments for each fiscal year in the forecast period can be found in Table 4.29, as follows:

Table 4.29: Key changes to debt interest since December
Forecast (£ billion)
  2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
December forecast 47.1 48.6 51.8 56.6 61.6 67.1
March forecast 46.5 49.5 51.8 57.8 64.4 71.3
Change -0.6 0.9 0.0 1.2 2.8 4.2
of which:            
Financing 0.0 -0.2 -0.1 0.4 0.8 1.3
Gilt rates 0.0 0.1 0.1 0.4 1.0 1.5
Short rates 0.0 0.0 0.0 0.1 0.1 0.3
Inflation -0.3 1.0 0.3 0.6 1.0 1.1
B&B and NRAM 0.0 -0.1 -0.1 -0.3 -0.4 -0.3
Other -0.2 0.0 -0.1 0.1 0.3 0.4

Public sector current receipts (PSCR) for each fiscal year in the forecast period can be found in Table 4.7, as follows:

Table 4.7: Current receipts
£ billion
  Outturn Forecast
  2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Current receipts 572.6 586.8 612.4 633.1 657.6 694.1 723.0
               
Memo. UK oil and gas revenues 11.3 6.5 6.8 6.1 4.7 4.8 4.3

The proportion of PSCR required to service debt interest payments for each fiscal year in the forecast period in the following table:

  PSCR Debt interest payments Proportion of tax revenue required to service debt interest payments (%)
2012-13 586.8 46.5 7.9
2013-14 612.4 49.5 8.1
2014-15 633,1 51.8 8.2
2015-16 657.6 57.8 8.8
2016-17 694.1 64.4 9.3
2017-18 723.0 71.3 9.9

The Government remains committed to reducing the deficit and addressing the permanent structural deterioration in the public finances caused by the lasting impact of the financial crisis. Implementation of the fiscal consolidation plans is well under way. As a result, the Government has made significant progress in reversing the unprecedented rise in borrowing between 2007-08 and 2009-10. Public sector net borrowing has fallen by over a third, from 11.2% of GDP in 2009-10 to 7.0% in 2012-13. Cumulative debt interest payments from 2010-11 to 2015-16 are forecast to be £31 billion lower than expected at the June Budget 2010.

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