HC Deb 12 December 2002 vol 396 cc391-2
10. Mr. Paul Goodman (Wycombe)

What assessment he has made of the accuracy of Treasury growth forecasts over the last three years. [85257]

The Chief Secretary to the Treasury (Mr. Paul Boateng)

Government forecasts are based on a realistic assessment of economic developments and prospects, and are broadly in line with the latest assessments from several leading independent forecasters. In recent years, GDP growth out-turns have tended slightly to exceed forecasts.

Mr. Goodman

At the time of the Budget, the Government's growth forecast was 2.5 per cent., and it is now 1.5 per cent. Will the right hon. Gentleman concede that the Treasury's forecasts have been humiliated? Why were the independent forecasters right and Ministers wrong?

Mr. Boateng

It was, in fact, 2 to 2.5 per cent. The underlying question that the hon. Gentleman needs to address—and the assumptions on which our economic forecasts are based—relates to the soundness of the underlying macro-economic policies that the Government have pursued. That is why we are able to read an IMF report, which says of our performance—

Mr. Eric Forth (Bromley and Chislehurst)

Selective.

Mr. Boateng

No, it is not a question of being selective. This is continuing from where my right hon. Friend left off. The IMF report says: As in the past, the Pre-Budget Report … provides a transparent and comprehensive account of the government's economic policies. Those policies are sound and on course, and we intend to stick with them.

Fiona Mactaggart (Slough)

How significant does my right hon. Friend find it that we have had a public sector surplus in four of the five years of this Labour Government, while the previous Conservative Government managed to achieve that in only four of their 18 years?

Mr. Boateng

Very significant, it will surprise no one to know. We took some hard decisions in the early days of this Government—decisions that Conservative Members opposed—such as those relating to the independence of the Bank of England and to our public spending plans. Taking those decisions has put us in a position to weather the international storm.

Mr. George Osborne (Tatton)

Will the Chief Secretary explain why the pre-Budget report summary leaflet that the Treasury has sent to the public to explain the pre-Budget report does not mention the fact that the growth forecasts were downgraded, or that any borrowing was going to take place? In fact, the only way to work out that there is going to be a deficit is to subtract one pie chart on the back of the leaflet from the other one.

Mr. Boateng

The Chancellor announced all the figures in the course of his statement. The pre-Budget report is published as it is. The hon. Gentleman knows what is contained in tables A and B. He is merely pointing out the virtues of a summary.