Professor John McHale:

I was trying to get at the issue. The rules are constraining at the moment in terms of the investment that we can undertake. What we have is an overall deficit target that includes both capital and current expenditure. I can see that with the backlog of investment projects - a lot of investment was postponed during the crisis - and the current low interest rate environment, one might ask why we are not undertaking those investments.

There is a strong logic to that. However, if one is going to do it on-balance sheet in the general Government accounts, one faces these overall deficit targets. What I was trying to do was to recognise the power of the argument the Deputy is making, because there is much economic logic to it, but it would be a positive development to develop the rules to make more of a distinction between current and capital so one does not face these types of constraints. However, even after recognising that, the point I was making is that one must still look at the overall deficit. There are also other factors, including the fact that we have this very high debt and the demographic pressures. Ultimately, the deficit we are aiming at is still appropriate notwithstanding the correctness of the argument the Deputy is making, that there should be more of a distinction in the rules.