How is this to be achieved? What is striking, to us at least, is that at the time of the 2009 Pre-Budget Report, the structural deficit was forecast to narrow by 5.4 percentage points over the same three years. At the time of the 2009 Budget, it was forecast to narrow by 5.3 percentage points. So, on that basis, it would seem that today’s Budget contained relatively little in terms of new fiscal measures. If the structural deficit is to narrow by 5.3 percentage points over the next three years, we need around £75 billion of savings in today’s money. Today, the Chancellor fleshed out around £19 billion of tax rises, and around £20 billion of spending cuts. On that basis, we have detail on just over one half of the necessary measures. Just over half of the spending cuts are to come from ‘efficiency savings’, which is never encouraging, while just over £3 billion is to come from limiting increases in basic pay in the public sector to just 1% in each of the next two years – regular pay growth in the public sector is currently running at 4.1%, so that would be some achievement.

Chris's article is as ever thought-provoking and he raises a critically important issue. As he says, the main thrust of our argument about the parlous state of the UK's public finances revolves around the fact that the so-called structural deficit is not only the biggest on record but also expected by the OECD to be the biggest among the major economies in2011. But, as Chris points out, neither we, the OECD or indeed HM Treasury actually know how big the UK's structural deficit is. So, maybe we're all worrying about nothing?