It is as though the Government were trying to lure the nation into some sort of collective sado-masochistic orgy of self-inflicted harm. As George Osborne cuts through the sinews of Britain’s bruised torso, we are told there is fairly universal recognition of, if not support for, the “unavoidable” need for cuts. So long as it affects somebody else. It hasn’t been felt yet, but the Chancellor’s knife – served up on a silver salver by the Liberal Democrats – is going for the bone. Many, most notably in the public sector and in the more responsibly grown-up circles of economic thinking, see not only the ideological madness in this route but the fact that it is one of choice rather than imperative. Many others are in denial of the economic tsunami that will roll over their lives if the Tory-Lib Dem coalition’s massive gamble goes wrong.
Signs that the Government’s economic credibility is failing came with the announcement that Sir Alan Budd, the Government “spending watchdog”, is to bail out as head of the Office for Budget Responsibility after only three months. The excuse that he was always going to leave after three-months setting up the much-vaunted independent, economic “flagship” lacks credibility, omitted as it was from Mr Osborne’s announcement of the OBR’s creation and the press release on its chief’s appointment.
The setting up of the OBR was a stunt – a mimicking of Gordon Brown’s surprise decision in the first few days of Labour to grant the Bank of England independence over interest rates. It was never independent, always intended as a fig leaf to lend spurious legitimacy to public spending cuts through bespoke forecasts. Sir Alan was warned by MPs at the beginning of this month that he and the OBR would come under intense scrutiny over his independence and forecasting after he rushed out figures claiming two million jobs would be created over the next five years in spite of the Government’s austerity measures and 600,000 public sector job cuts. His position inside the Treasury and dependence on its staff to draw up forecasts on Government spending and growth also attracted critical questions. Even as Tribune went to press all media inquiries to the OBR were being forwarded to the Treasury.
Adam Lent, the TUC’s chief economist, summed it up: “The irony is that George Osborne created a less transparent and accountable system…the OBR forecasts are much more important politically and economically than any analysis in the Budget, and yet they are far less detailed, they aren’t audited by the National Audit office and, because they are supposedly independent, the Chancellor can’t be held responsible for them in the House of Commons.”
It seems the kitchen was getting too hot for Sir Alan, who has left this flagship with no head, no permanent home, no accountability, few staff (one a former senior economist at the Royal Bank of Scotland and the other the architect of spending plans now being trashed), and no role except to pull the wool over the public’s eyes.
Welcome to your new Government.
