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Budget

Volume 703: debated on Tuesday 22 July 2008

asked Her Majesty’s Government:

What is their response to the formal opening of an excessive deficit procedure against the United Kingdom following agreement by the Economic and Financial Affairs Council of the European Union, and to what timescale they will act to bring the United Kingdom’s budget deficit below 3 per cent of gross domestic product, as required, given the Government’s responsibility to manage the economic and fiscal affairs of the United Kingdom in the interests of the United Kingdom and its people. [HL4898]

The Government have consistently supported a prudent interpretation of the stability and growth pact, which takes into account the economic cycle, the long-term sustainability of public finances and the important role of public investment.

Budget 2008 projects a treaty deficit of 3.2 per cent in 2008-09, falling to 2.8 per cent in 2009-10. This is consistent with the recommendation adopted by the Economic and Financial Affairs Council.