House of Commons - Budget 2009

Budget 2009 - Treasury Contents

2 The economy

Growth forecasts

3. At the time of Budget 2008, the Treasury forecast that GDP growth would be 1.75% to 2.25% in 2008, 2.25% to 2.75% in 2009 and 2.5% to 3% in 2010.[3] The forecast as presented in the Pre-Budget Report 2008—eight months later—was significantly weaker, with the Treasury forecasting 0.75% GDP growth in 2008, a range of -1.25% to -0.75% in 2009 and 1.5% to 2% in 2010, with growth reaching 2.75% to 3.25% in 2011.[4] At the time of the 2008 Pre-Budget Report, we noted that "the outlook for economic growth remains highly uncertain", but that the "balance of risks to the Treasury's forecast is on the downside".[5]

4. Budget 2009 saw another substantial downward revision to the Treasury's growth forecasts, with the Treasury now forecasting a contraction of 3.5% in 2009, followed by a resumption of economic growth of 1.25% in 2010 and a sharp increase of approximately 3.5% in 2011.[6] The 2009 Budget was delivered on the same day that the International Monetary Fund (IMF) published its growth forecasts for the UK economy. The IMF estimated that the UK economy would contract by 4.1% in 2009 with the economy continuing to contract by 0.4% in 2010.[7] Meanwhile, independent forecasts of growth in the UK economy—published by HM Treasury alongside the 2009 Budget—illustrate considerable uncertainty around growth prospects for the UK economy. The average of new forecasts was for -3.7% growth in 2009 and 0.3% growth in 2010, but estimates ranged between -4.5% and -1.3% for 2009 and -1.2% and 2.5% for 2010.[8]

5. Martin Weale, Director of the National Institute of Economic and Social Research (NIESR), and Roger Bootle, Managing Director of Capital Economics, explained the consequences for the Government's 2009 growth forecasts of the publication by the Office for National Statistics (ONS)—two days after the 2009 Budget—of preliminary data showing that GDP had declined by 1.9% in the first quarter of 2009, worse than market expectations of a 1.5% decline. Mr Weale said that the 1.9% figure would be more likely to be revised downwards than upwards as "during a slump the experience is often that the early estimates are revised downwards slightly". [9]

6. Mr Weale went on to explain that the consequences of this first quarter deterioration in the UK economy, meant that in order to meet the forecast of a 3.5% contraction in 2009 "we need essentially no or only a very small further contraction" through the rest of 2009. He expanded on this, telling us that the forecast could still be achieved if, for example, the economy contracted by around 0.1% in the second quarter with no output falls thereafter or through a "further fairly sharp fall in output in the current [second quarter] and then a fairly sharp recovery in the fourth quarter".[10] Roger Bootle agreed with Mr Weale that "you can get 3.5% if there is flat output for the rest of the year", but explained that if output continued to contract in the second quarter then meeting the forecast would require "a recovery by the end of the year". Mr Bootle believed that a recovery in the fourth quarter was "possible", but concluded that that would be "going some".[11] Dave Ramsden, Chief Economic Advisor for the Treasury, stressed that the ONS's first estimate of GDP for the first quarter of 2009 should be treated with caution given that it was "made up of 50% of forecast" and given the "mixed messages coming from different data". He emphasised that before the 2009 Pre-Budget Report the ONS would "produce at least two, if not three new estimates of what happened in Q1".[12] Mr Ramsden confirmed that the Treasury had no intention of revising its growth forecasts in the light of the ONS figures.[13]

7. Mr Bootle believed that there was "a danger of focusing on the wrong year", namely 2009, and that whilst there were some differences in forecasts for 2009, the differences were "not that big" compared to the differences in forecasts for 2010 and 2011.[14] Mr Weale told us that although he would "not be surprised to see an element of recovery" in 2010, he did not expect that recovery to lead to growth of 1% or more.[15] Mr Bootle, concurred, telling us that, whilst he did not "totally discount" the official forecasts, the uncertainties were "enormous".[16]

8. Discussing the Government's projection of 3.5% growth in 2011, Mr Weale reminded us that "the error margin surrounding all forecasts are inevitably large two years ahead". He emphasised that during an economic recovery, growth would be faster than trend (trend output is currently assessed by the Treasury as 2.75%), and as a result did not "regard 3.25% as a ridiculous number", although he was expecting growth [in 2011] to be lower than this. Mr Bootle disagreed, suggesting that whilst a 3.5% projection was not ridiculous it was "hardly cautious". [17]

9. Mr Bootle cautioned against putting the IMF's more pessimistic projections for the UK economy "on a pedestal above other forecasters", arguing that their forecasting record was not particularly impressive. He did however note that the IMF had a reputation for producing "conservative" forecasts, which meant that when the IMF comes out "with a forecast which is notably more pessimistic than the Treasury … that has rather more weight … than an equivalent forecast from some other body".[18]

10. Mr Ramsden for the Treasury, rebutted the charge that the Government's growth forecasts for 2010 onwards were overly optimistic. He believed that there would be significant spare capacity at the beginning of the recovery and that there was "potential for that capacity to be taken up relatively quickly" given the "UK's flexible economy, flexible labour and product markets". He offered the parallel with the recovery from the early 1990s recession to support his stance, telling us that "growth grew at an average rate of 3.25% for five years in the 1990s".[19] Mr Ramsden went on to explain why the Treasury believed growth would resume in the fourth quarter of 2009:

Mr Ramsden also believed the recovery would be strengthened by two measures introduced in the 2008 Pre-Budget Report—the ending of the lower rate of VAT at the end of the year meant that there should be a relative price effect bringing forward consumption into the fourth quarter of 2009, and the measures on stamp duty would "encourage some increase in transactions and consumption related to that in Q4". Mr Ramsden concluded by saying he stood by "the judgments that we have made in our forecast".[21] The Chancellor stressed that forecasting economic growth was made more difficult by the fact that "we are living in extraordinary and very uncertain times", but defended the Treasury's forecasts:

11. The Treasury's forecast in the Budget is for the economy to begin recovering in the final quarter of 2009 before going on to register strong growth of 3.5% in 2011. There is, understandably, considerable uncertainty around the Government's growth forecasts for 2009-2011, reflecting the fact that the UK economy is in uncharted territory. This uncertainty is demonstrated by the large number of independent forecasts which are more pessimistic than the Government as well as the smaller number of forecasts which are more optimistic. In particular, we note that the IMF believes the UK will continue to contract in 2010. Whilst it is possible that the Government will meet its growth forecasts, on the available evidence, this is an optimistic assumption. We question the decision to assume that the economy will begin registering positive growth as early as the fourth quarter of 2009, and that the economy will register such strong growth in 2011.

Rebalancing the economy

12. Budget 2009 noted that the tightening of credit conditions facing households and companies, and the depreciation of sterling since mid-2007, provided the backdrop for a "significant rebalancing of demand in the UK economy".[23] This macroeconomic adjustment was likely to entail increased saving by households, increased investment by companies, and a rebalancing of domestic and external demand with net trade contributing positively to GDP growth over the period 2009-2011.[24]

13. Mr Ramsden confirmed that the Government was "expecting a significant rebalancing of the economy through the recession". Indeed the Treasury told us that "developments in the second half of 2008 suggest that this adjustment may be taking place at a more rapid pace than many had expected". It noted that the second half of 2008 saw a "slightly larger than expected fall in consumer spending but a slightly smaller than expected fall in investment".[25] Mr Ramsden highlighted the fact that the savings ratio was predicted to pick up significantly" over the 2009-2011 forecast period,[26] with the savings ratio forecast to rise from 2% in 2008 to 4.5% in 2009, 5% in 2010 and 5.5% by 2011.[27] Over the same period, household consumption growth, which was 1.25% in 2008, was expected to fall by between 2.75% and 3.25% in 2009, thereafter growing modestly at around 0.25% in 2010 before rebounding sharply to 3-3.5% in 2011.[28] Mr Ramsden told us that by 2011 he expected household consumption "to be contributing significantly to growth".[29] He rebuffed the charge that the Treasury was being over-optimistic in its assessment of the bounce-back in consumption in 2011, telling us that, with the savings ratio having risen and the vast majority of people remaining in employment, the conditions would be in place for household consumption to grow strongly. [30]

14. Mr Ramsden also highlighted the role net trade would play in contributing to growth over the 2009-2011 period telling us that it "contributes half a percentage point in 2009 and half a percentage point in 2010".[31] He expressed the hope that it could make an even stronger contribution to growth than predicted over the forecast period. This was because, assuming the eurozone economy recovered as the Treasury was forecasting, the extent to which sterling had depreciated against the euro, would leave the UK in a strong position.[32] Our experts concurred that the depreciation of sterling put the UK "in a very good position", but cautioned that export growth would "not materialise until our major trading partners, which are Germany and the United States, start to recover themselves".[33] We asked Mr Ramsden what would happen if the eurozone and the USA did not return to positive growth in 2010, as is forecast in the 2009 Budget.[34] He acknowledged that the "resumption of world trade and global activity" were "key conditioning assumptions for our forecasts" and that this was why the Government attached "so much importance to the G20 process" and for "G20 leaders to both commit to action and then take it".[35] Mr Ramsden concluded by saying that, in the event that world trade and growth failed to pick up, the Treasury would begin looking at alternative ways to the achieve the "same growth rates".[36]

15. It is clear that the recession has acted as a catalyst for the rebalancing of demand in the UK economy. This rebalancing entails a shift away from consumption with a concomitant rise in the savings ratio, with net trade also playing a more important contributory role to growth over the 2009-2011 period. We note, however, that the contribution net trade will make to growth is contingent upon a speedy recovery in the UK's major trading partners and on the fulfilment of commitments made at the G20. Consumption is forecast to recover sharply in 2011 but we are concerned that this may be too optimistic given that the UK economy will only just have emerged from a sharp downturn. Additionally, the strong rebound forecast in consumption growth from 2011 onwards has important implications for whether the rebalancing of the UK economy is merely a short-term phenomenon or whether the Government should take steps to ensure such changes prove more durable. Savings will need more encouragement.

Fiscal stimulus

16. The significant worsening of the economic outlook led the Government to announce a fiscal stimulus at the time of the 2008 Pre-Budget Report. The fiscal stimulus comprised a "temporary reduction in the VAT rate to 15% with effect from 1 December 2008 to 31 December 2009", as well as the bringing forward of £3 billion of capital spending from 2010-11 to 2008-09 and 2009-10. According to the Pre-Budget Report 2008, this discretionary action, which would cost £16 billion, would deliver an overall fiscal stimulus of around 1% of GDP in total in 2009-10 and reduce the extent of the downturn by about 0.5%.[37] At the time of the 2008 Pre-Budget Report, we concluded that "the overall effect of the fiscal stimulus remains uncertain" and that "the cost of the reduction in VAT is considerable and, in the view of the majority of commentators, the Treasury's analysis of its impact is an optimistic one". [38]

17. We asked our expert witnesses whether the November 2008 fiscal stimulus, and in particular the reduction in VAT, could be described as a success. Martin Weale told us that the VAT cut was designed to "encourage people to buy in anticipation of future price rises" and that, if this was to occur, it would "be observed at the end of this year rather than at the moment". Robert Chote cast further doubt on assessing the success or otherwise of the VAT reduction, noting that "the difficulty is discerning what would have happened to the path of consumer spending in the absence" of a reduction.[39]

18. The NIESR has called for a second fiscal stimulus at the time of the 2009 Budget, of around 2% of GDP [40] which Martin Weale explained could have been spent on a "one-off rebate to taxpayers and pension recipients".[41] Mr Weale argued that the case for a further fiscal stimulus was the same as the case for the first fiscal stimulus, namely that:

19. Mr Chote focused on the implications for the public finances of further stimulus, explaining that such a stimulus would "pale into significance" in terms of the "impact on the path of public sector net debt compared to the underlying deterioration". A further fiscal stimulus could be looked at in two ways:

Mr Bootle told us that, whilst he had initially been in favour of a second fiscal stimulus at the time of Budget 2009, he had changed his mind "because of the emerging news about the sheer scale of the deficit". He explained that any attempt to stimulate the economy with "an extra 1% or 2% or 3% of GDP would actually be quite dangerous in terms of the way the markets would perceive this".[45] Mr Chote expanded on these comments, stressing that the 'credibility' of any further fiscal stimulus depended on "the quality of the plan the Government has in place to repair the underlying problem".[46]

20. Mr Ramsden for the Treasury rejected the suggestion that Budget 2009 should have contained a second fiscal stimulus. He believed that there was "a very, very significant amount of stimulus already in the system", citing, as examples, interest rates which were at "historic lows" as well as the Bank of England's quantitative easing policies.[47] Mr Ramsden also referred to the "targeted stimulus" measures in the 2009 Budget. The Chancellor acknowledged that some economists, such as Martin Weale and Professor Blanchflower, had advocated a further fiscal stimulus, but countered that the Government had already introduced "quite a substantial fiscal stimulus" into the economy and that this was "sufficient". He went on to say that there was a trade-off and that he needed "to balance what you do by way of stimulus with the fact that at the end of the day it has got to be paid for".[48]

21. It remains too early to judge whether the November 2008 fiscal stimulus—and in particular the VAT reduction—has been successful. There has been much discussion of whether a subsequent fiscal stimulus, separate from the stimulus provided by the automatic stabilisers was necessary, but ultimately the Government decided against introducing a further large-scale fiscal stimulus at the time of the 2009 Budget. No doubt the debate around the need for a further fiscal boost to the UK economy will continue, particularly if growth in the economy fails to pick up. Any discussion of additional stimulus must take into account both the implications for the public finances of such a boost and the credibility of the Government's plans to bring the budget back into balance.

Unemployment

22. The economic downturn has led to a weakening of the labour market and an increase in unemployment. ONS figures published on the day of Budget 2009, showed a significant increase in unemployment—by 177,000 over the quarter and 486,000 over the year—to 2.10 million. As a result the unemployment rate for the three months to February 2009 now stands at 6.7%. This is the highest level of unemployment in the UK since 1997.[49]

23. In a recent speech, Professor David Blanchflower—a member of the Monetary Policy Committee—raised the spectre of unemployment potentially rising to the 4 million mark.[50] Professor Blanchflower noted, when he appeared before us in February 2009, that around 40% of the unemployed were aged 24 or under and warned that:

Professor Blanchflower urged policy makers to focus on 'unemployment' and argued that assistance needed to be targeted on groups, such as the young "that are really going to be hurt".[52]

24. Budget 2009 contained a number of measures to support employment, building upon policies introduced at the 2008 Pre-Budget Report. Measures announced in this year's Budget included setting aside an additional £1.7 billion for the Department for Work and Pensions (DWP) over the next two years to ensure that Jobcentre Plus is sufficiently well-resourced. The £1.7 billion comes on top of an increase in funding of £1.3 billion for Job Centre Plus announced at the time of the 2008 Pre-Budget Report. There were also measures targeted at younger people, including:

guaranteeing everyone aged between 18-24 who has been claiming Jobseekers Allowance (JSA) for 12 months a job, work placement or work-related skills training for at least six months;
the establishment of CareFirst which will offer 50,000 traineeships for young people in the care sector with employers participating in the scheme receiving a subsidy for offering employment and training to young people who have been out of work for at least twelve months.[53]

25. Martin Weale was gloomy about the prospects for unemployment, predicting that it would rise above 3 million.[54] Mr Weale made one caveat to this prediction, however, saying that "one unknown factor which will have an impact on unemployment is the extent to which many of the recent immigrants into the country may return home".[55] He was unsurprised that young people accounted for such a high proportion of the unemployed, telling us that the evidence showed that the problem of unemployment was most acute amongst "people entering the labour market" as well as those "closest to retirement".[56] Mr Weale believed it was a good idea to target assistance at groups who were at high risk of unemployment and, as a result, he supported the Government's approach of targeting assistance at younger workers, but said that it would be unlikely that these Government measures "would stop unemployment rising to three million". [57] Mr Weale explained that this was because proposals such as guaranteeing a job, work placement or training after twelve months for those under 24 involved a significant "time lag" because they would only qualify after 12 months of claiming JSA.

26. Mr Ramsden would not comment on whether the Government's proposals would prevent unemployment rising above 3 million. Instead he told us that Government policies were "a sufficient and serious response to the needs of the labour market".[58] The Chancellor expanded on Mr Ramsden's comments, telling us that, whilst the Government had targeted specific measures at those aged 24 or under, he was also "focused" on assisting unemployed people aged 25 or over.[59] He explained that the additional resources being pumped into Job Centre Plus were "designed to help anyone who loses their job", but felt that specific targeted support through the "guarantee for 18-25 year olds" was also necessary because a short spell of unemployment at a young age could "lead to quite a long period in and out of employment".[60]

27. There is a strong possibility that unemployment will rise above three million, with some economists warning that it is possible that unemployment could rise as high as four million. Approximately 40% of the unemployed are likely to be young people aged under 25. We agree with Professor Blanchflower that this necessitates measures focused on assisting young people and, to this end, welcome the Government's approach of targeting resources on this group. That said, it is too soon to judge whether the Government proposal that all young people who have been on Jobseeker's Allowance for 12 months will be guaranteed a job, work placement or training opportunity, together with the monetary and fiscal stimuli, are a sufficiently timely and substantial response to the scale of the unemployment challenge.

Quantitative easing and the Asset Purchase Facility

28. In our Report on the 2008 Pre-Budget Report in January 2009, we noted that "the risk of a self-reinforcing deflationary cycle" existed in the UK economy.[61] Since then, the MPC has instituted a policy of 'quantitative easing', using the Asset Purchase Facility, to counter such a risk of a period of sustained deflation.

29. The Asset Purchase Facility was originally announced on 19 January 2009.[62] At that time, the aim of the Facility was to purchase "high quality private sector assets, including paper issued under the CGS [Credit Guarantee Scheme], corporate bonds, commercial paper, syndicated loans and a limited range of asset backed securities created in viable securitisation structures", up to a value of £50 billion.[63] The scheme was sterilised, which meant that it had no direct impact on the overall supply of money in the economy, as it was funded by Treasury Bills.[64] However, the Treasury left scope for the Facility to be widened. It permitted the MPC to request the use of asset purchases for monetary policy purposes should it conclude that this would be "a useful additional tool for meeting the inflation target".[65] The Governor wrote to the Chancellor on 17 February 2009 to request such a move.[66] He explained that the MPC had, at its February meeting, discussed its latest forecasts for GDP growth and CPI [Consumer Prices Index] inflation. Those forecasts pointed to "a substantial risk that inflation would undershoot the target in the medium term".[67] As such, the Committee had unanimously concluded that "it might be necessary to use asset purchases at future meetings in order to meet the 2% target for CPI inflation".[68] The Chancellor, in his reply on 3 March 2009, agreed to the requests of the MPC to:

finance purchases under the Asset Purchase Facility using Central Bank Money; and
extend the range of debt eligible to be purchased, by authorising the MPC to use the Asset Purchase Facility to purchase UK Government debt on the secondary market.[69]

30. By these changes, the Asset Purchase Facility had therefore changed into an unsterilised scheme, which would now increase the money supply directly. The Governor, in his letter to the Chancellor explained that if the facility could be used "to buy gilts on the secondary market financed by central bank money, this would be similar to the current implementation of monetary policy, except that the instrument of policy would shift towards the quantity of money provided".[70] This was necessary after the Bank rate in the UK was reduced to 0.5% on 5 March 2009.[71] As the February 2009 Inflation Report pointed out:

The new unsterilised Asset Purchase Facility would act as the tool of monetary policy now that the Bank rate had fallen too close to zero to be effective in that role. The Inflation Report outlined how this would work:

First, by increasing the supply of broad money, private sector spending should be stimulated, both directly (through the increase in money holdings of private sector asset sellers) and indirectly (through an expansion by banks of the supply of credit).
Second, to the extent that the extra reserves are used to make targeted purchases of high-quality but temporarily illiquid assets issued by private sector borrowers—in a way similar to the operations currently being conducted by the Bank—they should help to provide greater confidence to investors that they would be able to sell those assets should they need to, reducing illiquidity premia and stimulating trading activity. That in turn should make it easier for some types of company to issue new market-based credit, reducing their reliance on the banking sector.[73]

31. In his letter to the Governor, the Chancellor outlined the size of the scheme. He authorised an increase in the scale of purchases to up to £150 billion, with up to £50 billion dedicated to the purchase of private sector assets.[74] The MPC voted at its March meeting to use only £75 billion of this sum, and the Governor told us that the aim would be to use close to this amount in three months.[75] This figure equated, roughly, to 5% of broad money[76] held by the non-financial sector, and it was felt by the MPC that this was the level of injection needed in the economy.[77] In its quarterly report on the implementation of the Asset Purchase Facility, the Bank noted that in the period up to the week ending 5 March 2009, some £985m of commercial paper had been bought under the Asset Purchase Facility, but that these purchases had been sterilised. Since then, over £14 billion had been spent using central bank money, with £982m on commercial paper, £128m on corporate bonds, and the majority, £12,993m, on gilts.[78]

32. We considered whether there remained the risk of a sustained period of deflation; for while the Retail Prices Index in the year to March 2009 fell by 0.4%, the Consumer Prices Index (as used in the Inflation Target) in the year to March 2009 had risen by 2.9%.[79] When asked whether he thought this danger had now passed, Mr Bootle told us that while it was "true that the recent inflation numbers have been rather disappointing if people were looking for a very sharp fall", this was the wrong time period over which to be concerned about sustained deflation.[80] He believed that the real risk of this was not in the immediate future "but rather a bit further out, say, in a year or 18 months' time".[81] He explained that as average earnings growth fell to "about zero or below", for which there was already some evidence, under normal productivity growth—or even slightly below normal—unit labour costs would start to fall.[82] At that point, competitive pressures would see businesses reduce their selling prices.[83] Mr Ramsden accepted that the Treasury had to be "vigilant" to the risk of sustained deflation but told us he saw sustained deflation "as a low probability risk".[84] He thought that the period of negative inflation was "going to be temporary".[85]

33. Mr Weale expressed dissatisfaction with the mix of assets being bought by the Bank as part of its operations, with its heavy emphasis on gilt purchases:

However, the Governor in his evidence on the Inflation Report, told us that the Bank of England expected its interventions in the corporate market to be "small".[87] For the Governor, the criterion for success was not the amount of corporate purchases that were made, but rather the "leverage that such purchases might have on the credit spreads in markets and the private sector issuance of that paper".[88] He was encouraged by the progress to date.[89] He provided the example of a company that "having been able to issue commercial paper to the Bank of England", the next time found "it was actually possible to issue [commercial paper] at the same spread to the private sector in the market".[90] Mr Ramsden explained that while there was "some way to go to the £50 billion", there were "already indications in terms of what has been described as the liquidity premium in some of these markets, that the differential of these riskier assets over government bonds is coming down".[91] This might reflect the impact of the twin-track approach of both gilt purchases and smaller interventions in the corporate sector debt markets.[92] The Chancellor agreed that the scheme should be judged not on the size of corporate purchases, but on their effectiveness.[93]

34. Mr Bootle was concerned that the lack of an exit strategy from the Asset Protection Facility was inhibiting a full commitment to quantitative easing. He explained that, according to economic textbooks, the central bank could produce infinite amounts of liquidity to beat deflation. However, he felt that the Bank of England had translated this "to infinity" to mean "£75 billion now and maybe another £75 billion later".[94] He told us that the authorities were "understandably worried", about the re-entry problem, that is to say, how the policy of quantitative easing could be reversed.[95] He concluded that if there were an exit strategy from quantitative easing which the markets found credible, then "the Bank could feel more confident about expanding the scope and size of quantitative easing".[96] The Governor however explained that "It may be that we do not need to take it [the additional liquidity] out, provided the further growth of money is in line with the growth of nominal national income".[97] He suggested that the obvious successor measures would be to raise interest rates, and tighten monetary policy.[98] The Chancellor noted that the inflation target of 2% would mean that, should inflation rise because of quantitative easing, the Bank would be able to raise interest rates to meet this inflation target.[99] On disposing of the purchased corporate bonds and gilts, he acknowledged that it would have to be done "in discussion with the Government's DMO operations anyway because the markets would want to have an idea of how the Bank of England was winding down its position", but that such discussions were not pressing concerns.[100]

35. The Asset Purchase Facility is a crucial tool of monetary policy, given the currently low level of Bank rate. We note the heavy bias towards the purchase of gilts under the facility. We note the concern of some that not enough is being done to provide adequate liquidity in the corporate debt markets. We expect the Bank of England to take every opportunity to use the £50 billion allotted to the purchase of corporate debt under the Asset Purchase Facility to ensure the effective operation of those markets. We also recommend that the Debt Management Office and the Bank of England develop strategies for the Bank to dispose of its increasing holdings of gilts and corporate debt.

3 HM Treasury, Budget 2008, p 157, Table B3 Back

4 HM Treasury, Pre-Budget Report 2008, November 2008, p 166, Table A3 Back

5 Treasury Committee, Pre-Budget Report 2008, Second Report of Session 2008-09,HC 27, p 7 Back

6 HM Treasury, Budget 2009, 22 April 2009, (hereafter Budget 2009), p 199, Table B3 Back

7 International Monetary Fund, World Economic Outlook, April 2009, p 65, Table 2.1 Back

8 HM Treasury, Forecasts for the UK economy: A comparison of independent forecasts, April 2009, p 3 Back

9 Q 68 Back

10 Q 6 Back

11 Qq 7-9 Back

12 Q 87 Back

13 Qq 88-89 Back

14 Qq 69-70 Back