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9 July 2010updated 27 Sep 2015 2:17am

FT story raises more questions about “independent” OBR

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

By Jon Bernstein

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:

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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:

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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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