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The OBR has upbraided David Cameron? Good – that’s kinda why George Osborne set it up

By Peter Hoskin
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Just as this grey Friday afternoon was slumping into the weekend, Robert Chote has written a letter to David Cameron that has electrified everyone again. I’ve pasted a copy of that letter to the bottom of this post, but the basic point is that the head of the Office for Budget Responsibility took issue with one of the lines in Mr Cameron’s speech yesterday. The Prime Minister claimed that the OBR itself was “absolutely clear that the deficit reduction plan is not responsible” for depressed growth – whereas, as Mr Chote points out, the organisation actually reckons that “tax increases and spending cuts reduce economic growth in the short term”.

The OBR has been criticised recently for its inaccurate forecasts, including for the revenue that might be raised from the 4G auction. Yet I think much of this criticism misses the point. I won’t reheat all the points that I made in a post defending the OBR – and not just because I only made them a couple of weeks ago, but also because this letter stands as a defence in itself. George Osborne established this independent body to remove political scheming and calculation from the construction of the public finances. It’s not there to make life easy for politicians. It’s there to crunch numbers free from the will of Downing Street and the Treasury.

Of course, this letter is rather unusual example of the OBR’s independence – it’s not specifically their role to fact-check the Prime Minister’s speeches, and they’ve only done so in this case because their own work had been misinterpreted – but it’s a good example nonetheless. Mr Cameron may have been stung in this case (although not too badly, particularly given the last couple of paragraphs), but it will be other Prime Ministers and other Chancellors in future. The OBR makes it harder for politicians to lie, obfuscate or misspeak. If only it had existed to counter the deceits of the Gordon Brown years – deceits that Ed Balls seems to have conveniently forgotten, as he gloats his way around Twitter this afternoon.

Anyway, good job, Robert Chote. Hopefully Mr Cameron will be more accurate in future.

Here’s the letter in two pages (click for a larger version):

Page 1

Page 2


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