asked the Chancellor of the Exchequer what estimate he has made of the effect on the money supply of the direct tax cuts in his Budget.
No direct estimate is available. It would not be valid to assess the effects of the direct tax reductions in the Budget independently of the other policy measures taken both at the time of the Budget and subsequently. More generally, such estimates can be produced only from a simulation on a detailed economic model, and are critically dependent on the assumptions made about, for example, interest rates and the exchange rate. As stated in the answer my hon. Friend gave to the hon. Member for Newham, North-East (Mr. Leighton) on 14 November—[Vol. 973, c. 622–23]—I am unwilling to commit by Department's resources to carrying out such work as it would involve disproportionate cost.