I have already commented on the dubious accounting of the Office for National Statistics this morning. So, let me now turn instead to the equally dubious accounting of the Office for Budget Responsibility (OBR).
As the Guardian noted yesterday:
Forecasts on the outlook for the public finances last year were beyond “a work of fiction”, the head of the Treasury's independent forecasting unit has suggested, after the government failed to provide details of its spending plans.
The report was based on comments made by Richard Hughes, the head of the Office for Budget Responsibility (OBR), to the economic affairs committee of the House of Lords. Giving evidence he said:
the OBR's forecasts were based on “questionable assumptions” that lead people to call his efforts a work of fiction.
Some people call [the projections] a work of fiction, but that is probably being generous when someone has bothered to write a work of fiction and the government hasn't even bothered to write down what its departmental spending plans are underpinning the plans for public services.
As was widely commented (including by me) last November, the departmental spending figures included in the autumn's OBR forecasts looked utterly implausible, implying cuts of an order that nobody thought possible to deliver.
What we now know are a number of things.
The first is that the government supplied no real estimates to the OBR. At best, it delivered a back of a fag packet figure that had no workings attached to it, or any detail, from which the OBR was then supposed to make up its numbers.
Second, the OBR forecasts lacked all credibility as a result.
Third, the OBR did not say that at the time, which shoots its credibility to pieces for good, in my opinion, at least under this leadership.
And fourth, we know that Rachel Reeves' supposed dependence on the OBR to provide independent endorsement of any plans she produces in the future is as shot to pieces by this as have been all Tory forecasts commented on by the OBR.
In summary, this is utterly unethical conduct by the OBR because they failed to disclose that the forecasts that they issue lacked any credibility, and they knew that at the time.
What a total mess.
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So, can government plans be any better than a “fag packet” estimate (given the uncertain world we live in)? Maybe not. If not, why have an OBR?
This week’s blog of Simon Wren-Lewis is quite relevant here – he echoes Richard Hughes’ sentiments that garbage in equals garbage out. It’s difficult not to feel some sympathy with his obvious frustration: at the end of the day he can only do what is in his remit – to call the OBR unethical is a bit strong. That the government is manipulating a supposed independent organisation should not come as a surprise though. But this is no reason to rubbish the idea and the diligence of the OBR folk – we will have to wait and see if Labour are prepared to give the OBR real independence and if Rachael Reeves follows a more honest path.
Wrong
The OBR did not highlight the issue in a timely fashion
That was deeply unethical
“a supposed independent organisation”.
An “independent” institution linked to Government in modern economics is a technical term for a Neoliberal approved institution. How did it become “independent” or approved? By providing advice and hiring economists who meet the test of Neoliberal discipleship. I repeat; this is not science. It is an abuse of the word science. It has no grounds for special status or indeed any credibility at all.
When I was last in the Treasury (a while ago now, I admit) the office of the OBR was a few doors down from the Chancellor. Please forgive my cynicism re independence.
I always have room for cynicism; Diogenes understood human nature more acutely than Plato or Aristotle.
“why have an OBR?”
Because Neoliberalism’s purpose is to ‘managerialise’ the economics, and bleach it out of politics altogether. There must be no legitimate debate about economic policy outside the neoliberal shibboleths. Economic policy must be run exclusively by politically appointed “professional” i.e., Neoliberal economists; who alone understand the “science”.
You think this utter tripe doesn’t work? Well, it has fooled the Labour Party fairly comprehensively. The Conservatives are a long lost cause; and now moving to the unelectable. Neoliberalism has to move on. Having trashed Britain for the Conservatives, it will happily move on and trash Britain again with Labour, using the same crackpot methods that brought you what are now described in heavily sanitised terms as “questionable assumptions”. Neoliberalism isn’t science. It is crude, scandalously useless ideology.
Agreed
Replying to Mr Warren: “why have an OBR?”
Why have fans in a fan dance when you know the end result?
This is about legitimisation, and to keep “us lot” – the powerless – discussing the nonesense that is churned out day in day out by assorted “august organs”.
I rather doubt that the people in them even believe the tripe they produce (which of course makes them hypocrites) – this situation is repeated not just in the Uk but in the EU – I know plenty of people in all sorts of institutions who say to me “Mike you are right – but” . It is very likely that north of 50% of the people in the OBR agree with you, Richard etc. Makes not a blind bit of difference, they value their pay check and toe the party line.
The OBR did flag that they didn’t believe in the departmental spending plans for after 2024-25 in a very elegant way, perhaps so subtly that it escaped those who aren’t really fiscal nerds. Historically they have had an underspend assumption which they deduct from whichever departmental spending plans, resource and capital, they get from HM Treasury. They struck off that underspend for both budgets in their November 2023 forecasts. They pointed to some overly technical reasons, but clearly it was because they thought departments could no longer afford to underspend – their planned allocations are that tight. To which HMT responded by reducing the spending plans by the same amount, leaving the fiscal sums unchanged.
Even if you are right such opacity is deeply unbecoming
I suspect it is difficult to publicly note that the Emperor has no clothes when you are beholden to the Emperor to pay your wages.
Shouldn’t stop them doing it, however.
The only thing ‘elegant’ here is the graceful ballet of your unsustainable apologetics. If they need this gymnastic expiation to rescue their tattered credibility, they are already lost.
It will not do.
BBC Scotland is now completely out of control over the Covid Enquiry in Edinburgh, in its efforts to destroy the reputation of the Scottish government during the pandemic. I do not dispute the entitlement to interrogate; or to expose errors, failures and mistakes; where the Scottish Government failed it must accept responsibility. But the BBC is spinning a tale that everybody is somehow shocked at the Scottish government’s peculiarly unique failure; its reputation must be ruined.
Let me be clear. there is no shock. Indeed the testimony of Professor Wheelhouse in some areas at least appeared to apply to both governments. Everybody knew there would be errors and failures. Indeed Nicola Sturgeon (unlike Johnson) made quite clear at the time there would be failures:
“First minister Nicola Sturgeon has admitted to mistakes over the treatment of Scotland’s care homes that will ‘stay with me forever”’as she sought to defend her handling of the coronavirus pandemic.
The SNP leader has been criticised for the Scottish government’s decision to transfer Covid patients from hospitals into care homes between March and May.
‘I wouldn’t claim to be proud to be any aspect of coronavirus – it’s been a tragedy. I’ve never tried to pretend that mistakes haven’t been made,’ she told BBC Radio 4’s Today programme.” (Quotation from ‘The Independent’; dated 30th November, 2020).
That doesn’t excuse the failures, but neither does it fit what the BBC is actually doing (in harmony with Unionist media like The Telegraph); in effect, and perhaps even purpose, using egregious political spin in order to place the Scottish response in the same bad light as has already fallen disastrously on the UK response; or indeed make the Scottish ‘fall from grace’ appear even worse. The BBC is failing impartiality.
This is a good post but fails to nail those truly responsible.
Why oh why did the Scottish government not employ Mystic Meg – she would have set them on the correct path – in a complex and fast moving situation that nobody had ever experienced before.
Cleary somebody with second sight would have been the perfect person to have advising ministers. Thus the BBC must ask Mrs Sturgeon at the earliest available opportunity: why was Mystic Meg not employed? A scandal in plain sight, those responsible should hang their heads in shame.
I have to stop now & have a lie down.