Downing Street Says » Prime Minister’s speech on the economy

» Monday, June 7, 2010

Prime Minister’s speech on the economy

Asked if the 70 billion figure of debt interest mentioned in the Prime Minister’s speech was an annual figure and if it was in today’s prices, the PMS said that the figure was an annual figure and it was best to check with the Treasury in terms of pricing.

Put that there had been a list of departments in the Prime Minister’s speech, including the Treasury, that had been named and shamed in terms of getting things wrong, the PMS said that the Prime Minister had said that the Treasury had been a Treasury that sanctioned [all of this] because it published growth forecasts that were far more optimistic than independent forecasts’. It was clear that the most recent forecast from the Treasury was more optimistic than the average independent forecast. All forecasts in the past had been the Chancellor’s forecasts, but now we would have the Office of Budget Responsibility’s (OBR) forecast. Fiscal policy had been planned on the basis of an optimistic view and therefore spending policy had been planned on that basis. That was why one of the first things the Government announced was that it would set up an independent body, the OBR, so that there would be an independent forecast that would underpin these judgements.

Put that the previous Chancellor had given overly optimistic forecasts, the PMS said that it was a fact that growth forecasts were more optimistic than independent forecasts.

Put that a senior civil servant in the Treasury could think that the Prime Minister didn’t trust them, the PMS said that the Prime Minister had been saying that some mistakes had been made in the past, but both the Prime Minister and the Chancellor had praised the work of the civil servants at the Treasury.

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