§ Mr.Michael Brownasked the Chancellor of the Exchequer what estimates he has made of the effect on the British economy if Government expenditure were cut by 5 per cent. a year in real terms for the next five years.
§ Mr. BiffenI regret that I am unable to provide my hon. Friend with the information requested. The consequences of any change on the fiscal stance will depend on the assumptions made. Such factors as monetary and exchange rate policy, as well as the detailed composition of the cuts, will be crucial to the outcome. A satisfactory analysis would require detailed discussions between the questioner and the operator of a macroeconomic model. I am unwilling to commit my Department's resources to what would be a complex and costly exercise. My hon. Friend may wish to pursue his inquiry via his access to the Treasury's economic model through the Library at the House of Commons.