The chair of the Office for Budget Responsibility says the chancellor still has £9 billion in headroom after announcing a 2p National Insurance tax cut in his Budget. Richard Hughes adds the OBR has revised projected net migration figures to 315,000 a year, despite the government's promises to cut the number. Report by Brooksl. Like us on Facebook at http://www.facebook.com/itn and follow us on Twitter at http://twitter.com/itn
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00:00 So our economic and fiscal forecast was largely unchanged from the one we set out back in November.
00:04 It left the Chancellor with more or less the same amount of headroom against his fiscal rule of
00:08 getting debt falling of around £12 billion. It was £13 billion back in November. So there was no
00:14 windfall from our forecast in the fifth year. There was a bit of a windfall in the near term
00:18 from lower interest rates, which gave him about £10 billion a year worth of extra revenue.
00:22 He spent all of that and more, which meant that by the end of the forecast period,
00:26 he had about £4 billion less by the fifth year. And that's what he used to deliver the net tax
00:31 cuts that were in the budget. And it left him with about £9 billion of headroom left against
00:37 his fiscal rule by the end of our forecast and taking account of his policies. So we have seen
00:41 a much bigger level of net migration over the last few years. And we expect it to be much higher over
00:47 our forecast period as well. We revised up our steady state level of migration in five years'
00:51 time based on ONS projections to 315,000, up from 345,000 in our previous forecast. But the net
00:59 impact on the overall level of output is much lower because actually that's offset by higher
01:04 levels of inactivity amongst the resident population. We've seen more people out of work
01:08 in recent months than we were expecting in our November forecast. And so that offsets
01:13 the GDP boost that you would otherwise have gotten from higher net migration.