Sir Alan Budd’s past criticisms of the Tories

Budd warned against early spending cuts and accused Thatcher of waging class war.

There may or may not be a political motive to Sir Alan Budd's surprise resignation as head of the Office for Budget Responsibility. But what one can say with certainty is that claims that his independence was compromised will have hurt him.

A leading economist and a founding member of the Bank of England's Monetary Policy Committee, Budd has long prided himself on his willingness to highlight uncomfortable truths.

Earlier this year, as the clamour for spending cuts grew, he warned:

If you go too quickly, then there is a risk that the recovery will be snuffed out and we will go back into a recession -- I mean what the Americans say: "Remember 1937."

There is now growing evidence that George Osborne's decision to reject the counsel of figures such as our own David Blanchflower, Robert Skidelsky and the chairman of the Federal Reserve, Ben Bernanke, is tipping Britain back into recession.

It was also Budd, as my colleague Daniel Trilling has previously noted, who correctly argued that the Thatcher government raised unemployment for political purposes.

Here's the key exchange from Adam Curtis's 1992 documentary series Pandora's Box:

Curtis: For some economists who were involved in this story, there is a further question: were their theories used to disguise political policies that would have otherwise been very difficult to implement in Britain?

Budd: The nightmare I sometimes have, about this whole experience, runs as follows. I was involved in making a number of proposals which were partly at least adopted by the government and put in play by the government. Now, my worry is . . . that there may have been people making the actual policy decisions . . . who never believed for a moment that this was the correct way to bring down inflation.

They did, however, see that it would be a very, very good way to raise unemployment, and raising unemployment was an extremely desirable way of reducing the strength of the working classes -- if you like, that what was engineered there in Marxist terms was a crisis of capitalism which re-created a reserve army of labour and has allowed the capitalists to make high profits ever since.

Now again, I would not say I believe that story, but when I really worry about all this, I worry whether that indeed was really what was going on.

The argument that the Thatcher government used unemployment as a weapon of class war is not an uncommon one. It's just that the sort of people who make it don't tend to move on to advise a Conservative chancellor. I expect we'll learn more about the real reasons for Budd's departure later this week.

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George Eaton is political editor of the New Statesman.

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Our new relationship with the EU may be a lot like the old one

For all the tough mood music, Theresa May has left room for concessions.

I'm sad and dismayed, but that's democracy for you.

The Mail is in a cheerier mood. "Freedom!" is their splash. "Dear EU, We're Leaving You" cheers the Express' while "Dear EU, it's time to go" is the Mirror's splash. "Dover & Out!" roars the Sun, who have projected those same words on the white cliffs of, you guessed it, Dover. "May Signs Us Out!" is the Metro's take.

"Brexit begins" is the i's more equivocal splash, "The eyes of history are watching" is the Times' take, while the Guardian opts for "Today Britain steps into the unknown".

The bigger story isn't the letter but its content, which leads the FT: "May signs historic Brexit letter and opens way for compromise". The government is finessing its red line on the competence of the European Court of Justice. (The word in Whitehall is that Theresa May hadn't grasped the importance of the ECJ as an arbitration mechanism after Brexit and for cross-border matters such as flights when she made her conference speech.)  And the PM has done a good job of not ruling out continuing payments to the European Union, her best path to the deal Britain needs.

A lot depends on what happens to the British economy between now and March 2019. The pound is down still further today but whether that's a minor eruption or the start of sustained losses will have significant consequences on how painful Britain's best path to the access we need to the single market - paying over the odds for the parts of membership that the British government wants to keep and swallowing that £50bn divorce bill - is doable or not.

For all the mood music emanating from May, she's quietly done a good job of clearing the obstacles to a deal where Britain controls its own immigration policy, continues to staff Europol and to participate in European-wide research, the bulk of our regulation is set by Brussels de facto if not de jure and we pay, say £250m a week into Brussels.

Our new relationship with the EU may be rather closer to our old one than we currently expect.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.