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Friday, October 9, 1998 Published at 16:26 GMT 17:26 UK

UK Politics

'Black hole' debt fears

David Heathcoat-Amory wants a Commons statement

Tories have estimated the UK could see a £13bn "black hole" in public finances under Labour - and demanded a Commons statement.

As they ended their annual party conference in Bournemouth, the Conservatives challenged Chancellor Gordon Brown to publish details of his new economic forecasts. Mr Brown announced earlier this week that growth next year would be lower than expected.

Shadow Treasury Chief Secretary David Heathcoat-Amory wrote to Mr Brown, telling him: "Your 1998 Budget was based on an assumed growth next year of between 1.75% to 2.25%.

"You have now confirmed that growth next year `will be more moderate' but you have so far failed to disclose your internal estimate of this reduction.

"However your press spokesman has briefed journalists that it could be in the region of 1%.

"A reduction on this scale would have a severe impact on your published expenditure and borrowing plans, on which many people are relying.

"We need to know whether you will raise taxes again, cut spending or let borrowing increase."

Mr Heathcoat-Amory said it was essential for Mr Brown to reveal his precise estimates and asked him to make a Commons statement when MPs return from their break on October 19.

Experts add up debt

Shadow Chancellor Francis Maude said he had asked experts at the Centre for Economic and Business Research to calculate the impact of a 1% growth forecast reduction.

[ image: Francis Maude says debt could be £13bn]
Francis Maude says debt could be £13bn
He said the analysts estimated debt would be £13bn higher during the three-year period of Mr Brown's Comprehensive Spending Review.

Mr Maude said: "These are worrying figures but the situation could easily get far worse.

"Many people now expect growth to slow below 1% in 1999 and to remain lower in the further two years.

"This would blow an even bigger hole in the public finances.

"Mr Brown should now come to the House of Commons and explain how he will fill this black hole - by cutting spending, raising taxes or allowing the Public Sector Borrowing Requirement to mushroom?"

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