Complete and utter fabrication – otherwise called the Office for Budget Responsibility

Posted on

The last Tory government collapsed, completely discredited by lies, scandal, misinformation and a loss of credibility.

George Osborne’s spectacular mishandling of the so called independent Office for Budget Responsibility is leading them down the same path already. This blog from the FT is just too important not to reproduce in full (so I hope they’ll forgive me):

The Office of Budget Responsibility faces a big credibility test today. Chris Giles, the FT’s economics editor, has an agenda-setting story that raises doubts over its very purpose and independence. It is far more significant than any speculation over Sir Alan Budd’s departure.

Through persistent questioning, Chris uncovered that the OBR tweaked its Budget forecasts at the last-minute to erase around 175,000 public sector job losses by 2014/15.

The political result? David Cameron was able to claim in the Commons that his Budget would cost fewer job losses than if Labour had been in power. Cameron was comparing apples and pears.

The OBR predicted that there would be only 30,000 extra public sector jobs lost over the next four years compared to if Labour was in power – 490,000 against 460,000 – despite the coalition’s much deeper spending cuts. This figure would have been vastly higher if the body hadn’t made these last-minute changes to its modelling.

The reasons for the revisions are even more surprising than the end result. Without telling anyone about the changes, the OBR assumed that George Osborne would:

1) Cut state contributions for public sector pensions (an assumption that pre-empts the conclusions of John Hutton’s pension commission)

2) Put the brakes on promotions in the public sector (even though the chancellor has never announced such a policy)

There are three possible explanations: the independent OBR is taking orders from the chancellor; practising economic telepathy; or inserting random policy into its forecasts.

Meanwhile actual coalition policy announcements that would lower long term growth under the original OBR model — such a limiting net-migration to 1990s levels — were excluded. Hmm.

The scandal is, of course, is that all of this lying (because that is what it is)  disguises the fact that this budget was deliberately designed to create mass unemployment.

That’s the scandal.

And who knows who will pay the price for it?