§ Mr. FlightTo ask the Chancellor of the Exchequer (1) what(a) anticipated changes in asset prices and (b) other determinants of tax receipts were used in predicting changes in the output gap on the public finances, as referred to in paragraph 2.43 of the pre-Budget Report 2002; [105319]
(2) what changes in the output gap on the public finances were anticipated in making the estimates of the changes in the size of automatic stabilisers as set out in Table 2.4 of the pre-Budget Report 2002. [105318]
§ Mr. BoatengThe relationship between the output gap and of the main components of tax receipts and public expenditure is outlined in 'Fiscal policy: public finances and the cycle', HM Treasury, March 1999,566W which describes the Government's methodology for producing cyclically adjusted fiscal aggregates. This methodology is based on the historical relationship between the output gap and key fiscal aggregates and therefore reflects the average impact of previous economic cycles on the public finances.
Its application only requires estimates of the output gap.