Question to the HM Treasury:

To ask Her Majesty's Government what estimate they have made on the effect on tax revenues of a one per cent (1) increase, and (2) decrease, in GNP.

The effect of changes in total economic output on tax revenues will depend upon the composition of any aggregate change, since the underlying tax bases (earnings, profits, consumption and so on) will be affected in different ways by different components of total output. For this reason, the Government does not hold a single estimate of the effects that changes to GNP (Gross National Product) would have on tax revenues.

The Office for Budget Responsibility publishes tax and spending ready reckoners. These ready reckoners show how changes to components of GDP (Gross Domestic Product) would affect tax receipts, alongside the effects of other economic variables. For example, a one percent increase in employment in 2018-19 is expected to increase tax revenues by £2.7bn in that year.