Professor John McHale:

The progress on the deficit has been extremely impressive and very welcome. In our pre-budget statement, we basically considered the plan the Government had set out for 2016 to be broadly appropriate. Everybody did not agree with that. There was more criticism from other institutions. However, we take into account the underlying growth in the economy. There is a mildly contractionary stance in the way an economist typically measures these things. We were looking at the improvement in the public finances, including the deficit, and we were reasonably satisfied with the course policy was on.

In this report, we expected for once to be able to say that we were supportive of the course that is being followed. It is not that we are always going out of our way to be critical but one must understand, to return to the previous point, that the one thing we do not wish to repeat is procyclicality in policy. It follows the pattern we discussed earlier. Despite the improvement in the deficit, which is quite impressive, that is why we felt we had to respond so strongly and took the unusual step of responding the morning after the budget. We had said something in the pre-budget statement, which basically signalled our support for the plan, but that was not what we were supporting. It is that, in particular, which has led to this quite strong response, to which the Deputy is reacting. However, I take his point in terms of some very impressive improvement in key public finance aggregates, both the deficit and the speed with which it is coming down.