The first Big Lie in this Budget – and, frankly, I’d be surprised to find a bigger one – is that the UK economy will enter a sustained three-year economic sprint of 3.5% A YEAR from 2011. David Cameron instantly and brilliantly ridiculed this as the theory of the “trampoline recovery”.
We journalists just had an on-the-record briefing with the Treasury where this was questioned. The Treasury official claimed that no one is really forecasting beyond two years, so there’s nothing to compare it against. Untrue. Five-year-forecasts are produced by, erm, HM Treasury (last one released here in February), and on page 23 we find the following:
So where on earth does the Treasury get its claim of a sustained three-year 3.5% recovery from? The public finances are based on a projection of 3.25% over three years which is just as ludicrous. This forecast is the basis of Darling’s deception – that the UK economy will rebound so we don’t need to cut state spending.
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