Mr. Seamus Coffey:

In principle, we agree with the Deputy that running a counter-cyclical policy would be appropriate, but that is not something we have done in the past few years. It is something that should be done on a consistent and continual basis, not just at a time when the economy is slowing down. While the risk of a severe contraction is low, it is possible. A more likely scenario in the context of a hard Brexit and the other risks we face is that there will be a slowdown in the economy, rather than an outright contraction. In principle, we are of the view that the Government should support the economy if there is a slowdown. That would happen naturally if there was a slowdown in tax revenue and an increase in unemployment-related spending. That stimulus would happen naturally, as Government spending would be rising faster than the growth rate of the economy. The risk we see is that if there were to be a more severe downturn or Brexit were to have a more negative impact on the public finances than that set out, we simply would not be able to allow those automatic stabilisers to proceed naturally. Our view is that while the Government should do it, there are risks that it might not be able to do so because one issue in running a budget deficit and spending money one does not have is that one must borrow. We face relatively benign conditions in the financial markets, but if we were to face a severe slowdown and a large deficit were to open up, given the very high level of debt we are already carrying, those benign financial conditions might not persist. It is not that the council is asking for a tight fiscal policy in case there is a hard Brexit or a severe contraction but that it might become a requirement of the financial markets to have such a policy, given the inappropriate policy we have had for the past few years.