19 Mr. Clohessy asked the Minister for Finance his views on the difference between the growth in public spending allowed in the programme for renewal and the actual growth in public spending which has occurred and is projected to occur from the current policies; and if he will make a statement about the cost of this difference to the Exchequer in terms of annual interest charges on increased borrowing. [7690/97]

21 Ms O'Donnell asked the Minister for Finance his views on the difference between the growth in public spending allowed in the Programme for Renewal and the actual growth in public spending which has occurred and is projected to occur from the current policies; and if he will make a statement about the cost of this difference to the Exchequer in terms of annual interest charges on increased borrowing. [7692/97]

I propose to take Questions Nos. 19 and 21 together.

The Government's policy programme A Government of Renewal includes the following statement in relation to public spending:

Over the period of this programme it is intended that the growth of current supply services spending will be constrained to a maximum of 6 per cent, in nominal terms in 1995, and to an average annual rate of 2 per cent in real terms over the following two years of the programme.

The actual growth in gross current spending over the period of the programme compared with the target growth is as follows:

In 1995 the target was for a 6 per cent nominal increase and the outturn was an increase of 5.6 per cent.

In 1996 the target was for an increase of 2 per cent in real terms and the outturn was an increase of 4.4 per cent in real terms;

In 1997 the target was for an increase of 2 per cent in real terms and the budget estimate provides for an increase of 4.7 per cent.

The increases in spending in 1995 and 1996 were due mainly to exceptional and unavoidable factors such as the payment of equal treatment liabilities of £140 million in 1995 and the EU disallowances or beef fines and BSE related costs in 1996. In 1997, increases in pay and social welfare account for 75 per cent approximately of the total increase in gross current spending. Full details of the increase in spending in 1997 were given in my statement on the publication of the abridged estimates volume and in my Budget Statement.