HC Deb 16 December 1999 vol 341 cc393-5
14. Mr. David Kidney (Stafford)

What assessment he has made of his Department's accuracy in forecasting United Kingdom growth since 1997. [101778]

The Economic Secretary to the Treasury (Miss Melanie Johnson)

Recent forecasts have been very accurate compared with those in the past. We have been helped by the National Audit Office audit of key assumptions, and the Government are ensuring that fiscal plans are set on a sound and prudent basis.

Mr. Kidney

Does my hon. Friend recall how many forecasters, including the Opposition, scoffed at the Treasury's forecast in this year's Budget of growth of 1 to 1.5 per cent? They said that the forecast was unrealistically high, but it has now been completely vindicated. How does my hon. Friend explain the Treasury's forecasting success when so many people have egg on their faces?

Miss Johnson

As my hon. Friend says, the Treasury's success is rightly to be contrasted with that of the right hon. Member for Horsham (Mr. Maude), the shadow Chancellor of the Exchequer, who said of my right hon. Friend the Chancellor at the time that we made those forecasts:

Until he wakes up to the worrying economic prospects facing Britain, he will never be able to get to grips with the situation. A couple of days later, the right hon. Gentleman said in his press release:

The economy is heading for a far sharper slowdown than the Government is complacently predicting. Is it any wonder, given that the Treasury got it right and the Opposition—as usual—got it wrong, that no one believes a word that the right hon. Member for Horsham says?

Mr. Edward Davey (Kingston and Surbiton)

In the economic forecasts for United Kingdom growth, is not the Treasury now deliberately underestimating growth in years two and three in the pre-Budget report to massage the public finances and to hide a huge Budget surplus in future years? Are not the Government amassing a huge election war chest? Will the Minister tell the Chancellor when he returns from the G20 that there is no point in being an iron Chancellor if he leaves our public services to rust?

Miss Johnson

The hon. Gentleman is wrong. We have shown the prudence that the previous Government should have shown when they looked at a brief moment and decided to make economic decisions that led us into boom and bust in the 1980s. They should have looked to the longer term, and that is what this Government are doing. We have made prudent assumptions and we are sticking to them. I will take no lectures from the Liberal Democrats on forecasting because they have spent 1p so many times that most of us have lost count.

Mr. Quentin Davies (Grantham and Stamford)

How can the Government possibly hope to forecast anything accurately when they are in denial about what is happening now? We heard from the Chief Secretary earlier more of this eyewash about the tax burden falling, but the figures—I have them here from the Library—show that, in every single quarter from 1997 to the second quarter of 1999, which is the last quarter for which figures are available, the tax burden has increased. Let me throw the figures to him now across the Dispatch Box so that he will not be able to continue to deny the facts. Can we please have an answer to the question?

Miss Johnson

The hon. Gentleman has, as usual, got it completely wrong. The figures are as my right hon. Friend the Chief Secretary said. [Interruption.] I am grateful to the hon. Gentleman for passing the figures across the Dispatch Box—[Interruption.] I do not need to pass across the key figures that Opposition need to reflect on, because they are their predicted tax rises for 19992002. [Interruption.]

Madam Speaker

Order, Mr. Paterson.

Miss Johnson

The Conservatives' figures for all three years show that there would have been a higher tax burden under a Conservative Government than there will be under Labour. As with everything else, the country is better off with a Labour Government.