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WEDNESDAY, FEBRUARY 27, 1985
+OUR KNOWN CONTINGENT LIABILITIES SHOULD BE $26.2 BILLION BY 1989 - TAKING OUR USUAL FOUR YEAR VIEW. ON THAT BASIS THEREFORE, WE NEED TO RESERVE OF THE ORDER OF $8.7 BILLION, WHICH MEANS $6.6 BILLION IN 'FREE' RESERVES AS AT APRIL 1985.
IT IS ARGUABLE THAT THERE IS A CONSIDERABLE DEGREE OF OVER PROVISION, FOR INSTANCE IN THE CASE OF GUARANTEES FOR HOME OWNERSHIP SCHEME MORTGAGES AND PARTICULARLY GOLD COINS.
*THE PRINCIPLES WILL BE RECONSIDERED BEFORE THE NEXT BUDGET,+ SAID SIR JOHN.
'SPENDING LOWER THAN EXPECTED'
***
REVENUE RECEIVED ON THE GENERAL REVENUE ACCOUNT FOR 1984-85 WAS CLOSE TO TARGET BUT EXPENDITURE WAS LOWER THAN EXPECTED, SAID THE FINANCIAL SECRETARY.
THE 1984-85 BUDGET ENVISAGED A DEFICIT OF $2.1 BILLION, SAID SIR JOHN, BUT THE ACTUAL OUTCOME FOR THE YEAR WOULD PRODUCE A DEFICIT OF ABOUT $1.8 BILLION. THE BOND ISSUE MEANT THAT THE ACTUAL SHORTFALL IS ABOUT $1 BILLION LESS - +BUT WE MUST NOT BE MISLED BY THIS.+
ON RECURRENT ACCOUNT, REVENUE IN 1984-85 IS EXPECTED TO BE MARGINALLY LOWER THAN THE ORIGINAL ESTIMATE BY ABOUT $200 MILLION ($30 464 MILLION ESTIMATED, $30 262 MILLION REVISED). THE REVISED ESTIMATE OF RECURRENT EXPENDITURE IS EXPECTED TO BE $674
MILLION LOWER THAN THE ORIGINAL ESTIMATE ($26 933 MILLION ESTIMATED, $26 259 MILLION REVISED).
+THIS IS THE THIRD YEAR RUNNING IN WHICH RECURRENT EXPENDITURE HAS BEEN HELD DOWN BELOW BUDGET, REFLECTING TIGHT FINANCIAL CENTROL, AND I THANK ALL VOTE CONTROLLERS FOR THEIR EFFORTS,+ SAID SIR JOHN.
ON CAPITAL ACCOUNT, REVENUE WAS EXPECTED TO BE SLIGHTLY LOWER THAN THE ORIGINAL ESTIMATE ($4 730 MILLION ESTIMATED, # 666 MILLION REVISED) AND EXPENDITURE WAS EXPECTED TO BE ABOUT THE SAME $10 400 MILLION ESTIMATED, $10 426 MILLION REVISED).
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