Professor Michael McMahon:

I think I was pretty clear on this in my answer to Deputy Nash. The temporal dimension of the spending should not be what determines the core or non-core. The unique nature of both the Ukraine and Covid spending, to my mind at least, justifies treating it somewhat separately even if it is going to be somewhat persistent. I cannot remember the exact wording we used, but let me state how I view the previous acceptance of some of the non-core expenditure. Last summer into last autumn we were facing into a sudden hike in energy prices. There was not just a hike in energy prices but huge uncertainty as to how far up they would go, how long that would last, what would happen over the winter, whether gas would be cut off and whether electricity prices would go through the roof. In that world uncertainty can hit demand in a big way and especially that of the most vulnerable. In that world, even if the Government classified that as core spending and as a result breached the spending rule we would still have said as a one-off breach it made sense at that time. Where we have taken greater issue with it now is some of the case for that type of support is disappearing. Moreover, there is a lovely chart in the pre-budget statement where one can see the once-off nature of the increase in spending as planned in the last budget. According to the summer economic statement it is not a once-off, but a persistent deviation from the Government's own set of rules. That is why labelling that as core or non-core is important. I could justify supporting a temporary support where it is necessary, whether one labels it core or non-core, but when it is persistent the argument is made that because it is non-core it does not count, then that is when we will take issue with it.