John McFall

A committee of MPs has given Gordon Brown his second warning within 24 hours about official forecasts for tax revenue.

Members of the powerful Treasury committee said on Thursday that expectations of buoyant tax revenues contain "significant risks".

The warning came the day after the Institute for Fiscal Studies warned that the chancellor may need to raise taxes by £11 billion to cover his spending plans.

According to the think tank, tax receipts are likely to fall significantly short of those forecast.

That warning was echoed by the MPs, who said that there was only a "narrow margin" for error over plans to ensure borrowing does not exceed investment over the course of an economic cycle.

The committee said that the Treasury "is projecting the fastest growth in receipts over the next two years since 1997".

"This forecast implies an acceleration in receipts growth in the final four months of this year and even stronger growth in receipts in 2005/06," said the report.

"While there are grounds for optimism, there are significant risks to this forecast and the Treasury needs to monitor developments closely."

The MPs said the chancellor had been too optimistic on the growth in tax receipts for four years running.

They pointed to "widespread doubts amongst experts and outside commentators about the Treasury's corporation tax forecasts".

And the committee said that the margin for meeting the "golden rule" on borrowing to invest was just 0.1 per cent of GDP.

"Many independent forecasters believe that this is too narrow a margin to be confident that the golden rule will be met," said the report.