§ Mr. LidingtonTo ask the Chancellor of the Exchequer what assessment he has made of the reasons underlying the growth in the level of manual adjustments made by HM Customs and Excise to their modelled forecasts for receipts over the years from 1995–96 to the present. [26412]
§ Mr. BoatengOfficials in HM Customs and Excise make manual adjustments to forecasts produced by economic models in consultation with officials from HM Treasury. The purpose of these adjustments is to provide more accurate forecasts of revenue receipts. This is conventional practice and such adjustments are made so as to capture events or trends that are not explicitly modelled, eg one-off events, such as the millennium celebrations; changes to the scope of the tax; changing tastes or new products.
The models for alcohol and petrol and diesel were re-estimated by Professor Marcus Chambers in 1999 (published as Government Economic Service Working Paper, Number 138). For most items the manual adjustments have been considerably reduced as a result.