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The public finances: 1997 to 2010 Robert Chote, Rowena Crawford, Carl Emmerson and Gemma Tetlow1 http://www.ifs.org.uk/bns/bn93.pdf

By 2007–08, the public finances were in a stronger position than they had been when Labour came to power in 1997. Though public spending increased from 39.9% in 1996–97 to 41.1% in 2007–08 (an increase of 1.2 percentage points), over the same period revenues grew by 2.3 percentage points, meaning that total borrowing fell by 1.0 percentage point over this period (figures do not sum due to rounding). With more being spent on investment in 2007–08 than in 1996–97, the current budget (that is, the difference between current revenues and spending on non-investment items) strengthened even more – from a deficit of 2.7% of national income in 1996–97 to a deficit of just 0.3% of national income in 2007–08. Meanwhile, public sector net debt fell from 42.5% of national income to 36.5%, as the UK economy grew faster than the accumulation of new borrowing