FT story raises more questions about “independent” OBR

Office for Budget Responsibility made late changes that helped Osborne and co score political points

This week's New Statesman leader -- "This government must strive to make its cuts accountable" -- expresses concerns over the independence of the newly created Office for Budget Responsibility (OBR). In it, we suggest that the OBR's decision to "rush out" a positive statement on job losses, a day after leaked Treasury data pointed to 1.3 million job losses across the private and public sectors, was worrying at best.

Now we learn, thanks to the Financial Times front-page lead this morning, that the OBR made "last-minute changes to its Budget forecasts that had the effect of reducing the impact of the emergency Budget on public-sector job losses".

According to the paper, the government has acknowledged this late change, which allowed George Osborne and David Cameron to claim that the coalition Budget would result in fewer job losses than an equivalent, albeit hypothetical, Labour Budget.

Blogging on the story, the FT's Alex Barker writes:

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.

One solution to this apparent lack of autonomy and threat of political interference, we suggest in our leader, "is to have the Treasury select committee appoint the OBR's chair, which would make the body accountable to parliament, rather than the executive".

Either way, the OBR is fast losing credibility. Peter Hoskin notes over on the Spectator's Coffee House blog:

Forget the hubbub about Gove's schools list, the most damaging story for the government this week could well be on the cover of today's FT.

UPDATE: A PoliticsHome poll has found that just 16 per cent of voters believe that the OBR is genuinely independent: 69 per cent subscribe to the view that "in practice it is part of the government".

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Jon Bernstein, former deputy editor of New Statesman, is a digital strategist and editor. He tweets @Jon_Bernstein. 

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Theresa May is paying the price for mismanaging Boris Johnson

The Foreign Secretary's bruised ego may end up destroying Theresa May. 

And to think that Theresa May scheduled her big speech for this Friday to make sure that Conservative party conference wouldn’t be dominated by the matter of Brexit. Now, thanks to Boris Johnson, it won’t just be her conference, but Labour’s, which is overshadowed by Brexit in general and Tory in-fighting in particular. (One imagines that the Labour leadership will find a way to cope somehow.)

May is paying the price for mismanaging Johnson during her period of political hegemony after she became leader. After he was betrayed by Michael Gove and lacking any particular faction in the parliamentary party, she brought him back from the brink of political death by making him Foreign Secretary, but also used her strength and his weakness to shrink his empire.

The Foreign Office had its responsibility for negotiating Brexit hived off to the newly-created Department for Exiting the European Union (Dexeu) and for navigating post-Brexit trade deals to the Department of International Trade. Johnson was given control of one of the great offices of state, but with no responsibility at all for the greatest foreign policy challenge since the Second World War.

Adding to his discomfort, the new Foreign Secretary was regularly the subject of jokes from the Prime Minister and cabinet colleagues. May likened him to a dog that had to be put down. Philip Hammond quipped about him during his joke-fuelled 2017 Budget. All of which gave Johnson’s allies the impression that Johnson-hunting was a licensed sport as far as Downing Street was concerned. He was then shut out of the election campaign and has continued to be a marginalised figure even as the disappointing election result forced May to involve the wider cabinet in policymaking.

His sense of exclusion from the discussions around May’s Florence speech only added to his sense of isolation. May forgot that if you aren’t going to kill, don’t wound: now, thanks to her lost majority, she can’t afford to put any of the Brexiteers out in the cold, and Johnson is once again where he wants to be: centre-stage. 

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