But of course these are all just projections and uncertain in size. The key point is that we all agree on the direction of effect and the need to reset supply-side policies to prioritise growth.
Where the CBP paper goes further than the commission is in its verdict on fiscal rules. In the paper’s view, the short run fiscal rules now pursued by the Government, which mandate that the debt-to-GDP ratio must be falling by 2027/28, are extremely damaging because they force policies into the sort of tax raising we have just seen.
Instead, it recommends that the debt ratio be brought down in the long term, in line with the long-run conditions for government solvency. In other words, “long run fiscal rules” allowing tax rates to be set for the long-run welfare of the economy, prioritising growth and allowing fiscal policy to complement monetary policy thereby stabilising the economy.
The CBP paper also addresses the paucity in recent years of economic leadership from No 10, as well as the strong policy influence of a second fiscal body, the Office for Budget Responsibility (OBR), which is in effect a privileged think tank in the private sector, yet paid for by the taxpayer.
Such an arrangement is not found elsewhere and should be fully under democratic control. The paper recommends creating an American-style Council of Economic Advisers to the Prime Minister and integrating the OBR into it as a Civil Service body with an expanded remit and capabilities supplying advice and economic expertise to the council.
So what should Jeremy Hunt do on Wednesday? For a start, the Chancellor should stop fretting about whether tax cuts are affordable. The truth is, we cannot afford not to cut tax. If we continue as we are, the economy will continue to stagnate or, even worse, dip into recession drowning the nation beneath oceans of red ink and triggering a doom loop of further tax rises and loss of productive capacity.
Mr Hunt is the politician, not me, but with an election on the horizon, he must surely see that it is time to release the handbrake and inject some life into the economy. If not, the outlook is bleak indeed.
Patrick Minford is a fellow of the Centre for Brexit Policy and professor of applied economics at Cardiff University
