David Prosser: Why Darling may not be able to deliver

Outlook There has quite rightly been a hullabaloo about Alistair Darling's refusal to explain how each government department will see its budget cut over the next four years as he tries to bring down the deficit. But the most pressing reason to question the credibility of the Chancellor's plans is not his lack of candour but his over-optimistic projections for economic growth. If these are not met, the deficit reduction plan has had it.

The Treasury will defend its forecasts as being broadly in line with those issued last month by the Bank of England. The trouble is that both sets of projections share a common weakness: they take no account of the fiscal tightening announced in the pre-Budget report.

It doesn't take a PhD in economics to work out that if you increase taxes, consumers' disposable incomes fall and they are less freely able to spend – or that if you raise taxes paid by employers, their businesses are constrained in a similar fashion. In other words, tax rises can be a brake on economic growth.

Strangely, the Treasury's projections have not been adjusted for the effects of the tax rises announced this week. More independent forecasters have been lowering their ambitions in the light of Mr Darling's statements.

In fact, before the financial crisis, at least this Government had a pretty decent forecasting record, frequently surprising its critics by hitting the ambitious targets it set itself. The problem this time, however, is that the Chancellor has so little room for manoeuvre. On the basis of its own growth projections, for example, accountant PWC reckons borrowing will be at £98bn in 2014-15: Mr Darling would then have broken his promise to cut the deficit by half.