HC Deb 24 February 2003 vol 400 c212W
Mr. Stephen O'Brien

To ask the Chancellor of the Exchequer, pursuant to his answer of 10 February 2003,Official Report, column 607W, on gross domestic product, if he will publish the research used to make the assumption that trend output growth is ¼ percentage point lower than the Government's neutral view. [99125]

Ruth Kelly

The Treasury's analysis of the rate of trend growth in output is set out in "Trend Growth: Recent Developments and Prospects" (HM Treasury, April 2002), which is available online at www.hmtreasury.gov.uk.

For the purposes of the public finances projections the Government adopt a deliberately cautious assumption for trend growth that is ¼ percentage point below its neutral view. In the interests of stability and robust, medium-term fiscal planning, this strikes the right balance between being a reasonable and a cautious assumption.

As set out in paragraph B20 of the 2002 pre-Budget report, over the period to 2006–07 this gives rise to an assumed rate of 2½ per cent: the Comptroller and Auditor General has audited this assumption and concluded that it is "reasonable and cautious".