To ask the Chancellor of the Exchequer to what extent he is currently over or under funding the public sector deficit. [1530]

From 1996–97 the funding rule was replaced by a target to finance the Central Government Borrowing Requirement (CGBR) plus maturing gilts and any net increase in the foreign exchange reserves through debt sales. The latest estimate of the 1996–97 financing requirement is £39.4 billion, of which £25.1 billion is to finance the CGBR, £12.4 billion is to finance gilt redemptions, and the remaining £1.9 billion is to finance the net change in foreign reserves and financing carry-over from 1995–96. Gilts sales in 1996–97 amounted to some £38.8 billion, sales of National Savings products £4.8 billion, and there was negative financing of £0.4 billion from sales of other public debt. Overall there was therefore a £3.9 billion excess of gilt sales relative to the final gilt sales requirement.