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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2010/12/number-10-plays-down-plan-b-claim.jpg"><img class="alignnone size-full" title="Number 10 is playing down reports that officials are preparing a 'Plan B' in case the economy takes a nosedive" src="http://londonglossy.com/wp-content/uploads/2010/12/min-number-10-plays-down-plan-b-claim.jpg" alt="Number 10 is playing down reports that officials are preparing a 'Plan B' in case the economy takes a nosedive"/></a></p>
<p>Downing Street has sought to play down reports that senior officials are preparing an economic &#8220;Plan B&#8221; amid fears of a sharp downturn.</p>
<p>Cabinet Secretary Sir Gus O&#8217;Donnell is said to have drawn up a confidential paper calling on the Government to consider possible stimulus measures in case the economy suddenly stalls, according to the Financial Times.</p>
<p>The FT said that while the first option would be to extend the Bank of England&#8217;s programme of quantitative easing &#8211; effectively printing money &#8211; the Bank could also lend directly to business by buying commercial bonds.</p>
<p>A third option, the FT said, could be tax cuts &#8211; although that would mark a major reversal of policy by the Government, which is set to raise VAT and has made tackling the deficit its top priority.</p>
<p>No 10 said ministers had not commissioned advice on an alternative economic strategy, but it was &#8220;quite normal&#8221; for officials to consider various possible economic scenarios.</p>
<p>&#8220;Ministers haven&#8217;t asked for advice on &#8216;Plan B&#8217; because they are very clear that the plan we have is the right plan. Recent experience in the sovereign debt markets shows that it is precisely the right plan,&#8221; the Prime Minister&#8217;s official spokesman said.</p>
<p>&#8220;It is quite normal for Government officials to be thinking about alternative scenarios and doing some thinking around that. I don&#8217;t think it is anything out of the ordinary.</p>
<p>&#8220;It is completely normal for the Treasury to be thinking about different scenarios for the economy &#8211; what might happen in financial markets. You would expect them to be doing that kind of work.&#8221;</p>
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