Who knew economic forecasters could get so impassioned? The Office for Budget Responsibility’s chairman Richard Hughes went gung ho in criticising the government at yesterday’s House of Lords economic affairs committee and blamed the Treasury for the OBR’s “work of fiction” forecasts. Not the first time he’s pointed the finger at Sunak and Hunt…

Hughes said the OBR’s forecasts are flawed because they are based on “questionable assumptions” and a lack of information from the government:

“Some people call [the forecasts] a work of fiction, but that is probably being generous when someone has bothered to write a work of fiction and the government hasn’t even bothered to write down what its departmental spending plans are underpinning the plans for public services“.

The forecasting chief wants the margin for error in debt-reducing fiscsal rules widened and warned that Hunt has given himself a “tiny” corridor in which to operate. It’s probably not a good idea to tie your budgets to a forecaster that has misjudged UK public sector net borrowing by £53 billion every year since its formation…

Chairman of the Office for Budget Responsibility (OBR), Richard Hughes, pointed fingers at Rishi Sunak and Jeremy Hunt, blaming them for the watchdog’s inaccurate predictions. The OBR managed to get its deficit forecast wrong by £30 billion last November, apparently the fault of the government. If you are making forecast errors of that magnitude on a three-month time horizon you are simply not responsible.

Now Hughes is preparing for his forecasts to be wrong again. He claimed forecasts might swing by as much as £30 billion again this time round, claiming this is courtesy of ministers’ knack for deviating from their own plans. Speaking to MPs on the Public Accounts Committee, he said:

“As we all know, there are patterns of behaviour in Government where they say they are going to do things and then everybody knows they are not going to do them. But we have to believe them when they say it…So that could drive up to £20-£30 billion error in our medium-term forecasts of public spending.”

He agreed with some economists that Hunt’s Autumn Statement which announced £20 billion of tax cuts while pencilling in equally large spending reductions was “implausible“. And Labour thinks the OBR should run the economy…

Office for Budget Responsibility chairman Richard Hughes and member of their Budget Responsibility Committee David Miles have appeared before the Treasury Committee this morning to talk about their views on the Autumn Statement. Hughes pointed out Hunt “hasn’t adjusted public spending plans“, with “pressure pushing up on spending and down on revenues“. A government planning to get debt falling in 5 years would find that objective “certainly at risk” in the current situation. As Guido pointed out last week, debt is rising in nominal terms, real terms, and as a percentage of GDP, despite Hunt’s jubilation at the Autumn Statment. A natural result of failing to control spending…

The OBR wasn’t keen on Hunt’s claim this is the largest tax cut since the ’80s and said that’s “not a figure we’ve used” and this is only the 3^rd “fiscal loosening” event since the body’s foundation in 2010. The economists said frozen tax thresholds instead have an “unambiguously negative effect” on incentives, combined with an NI cut that is “swamped” by stealth tax rises. Sunak and Hunt were probably expecting more people to be distracted by the cuts than focus on their continuing massive tax grab…

Now the Office for Budget Responsibility isn’t even trying. This morning, less than a day after the Autumn Statement, the OBR’s Chairman Richard Hughes held a fireside chat with none other than Torsten Bell at the latter’s left-of-centre think tank, the Resolution Foundation. The same Resolution Foundation that spends its days pushing for ever-higher welfare payments and attacking every Tory chancellor since George Osborne.

Why would Hughes appear at the Resolution Foundation, flanked by Resolution Foundation employees and effectively endorsing the Resolution Foundation, when he’s running an ‘independent’ body that blesses every policy coming out of the Treasury? Maybe it has something to do with the fact that he used to work there, spending his days co-authoring reports on the horrors of Brexit and rubbing shoulders with the man who used to be Ed Miliband’s policy director. You can perhaps wonder if Kwasi Kwarteng had legitimate suspicions about the OBR/Resolution Foundation marking his homework. The Resolution Foundation has a left-leaning ideological position, plain as day. Even the BBC thinks so…

There’s been plenty of media squawking in the last couple of weeks over the lack of an Office for Budget Responsibility (OBR) forecast in the mini-Budget. Never mind the fact the OBR didn’t even exist until 2010, without its explicit blessing, how can any fiscal policy ever be trusted?

Even a cursory look at the OBR’s personnel gives you an idea of which school of thought its leaders belong: both the chair of its Budget Responsibility Committee and its Deputy Chief of Staff are former colleagues or protégés of Torsten Bell, chief executive of the left-of-centre* Resolution Foundation (RF). Torsten Bell will be a familiar face to co-conspirators. Before he spent his days pushing for ever-higher welfare payments at the RF, Bell was Labour’s Director of Policy under Ed Miliband. For years it seemed carving Labour’s manifesto into stone would be his crowning achievement. It turns out seeing his friends land top jobs overseeing government fiscal policy has won out…

Richard Hughes, now the chair of the OBR’s Budget Responsibility Committee, spent a year alongside Bell at the Resolution Foundation as its research associate, where he:

• Co-authored new fiscal rule proposals which were “urgent” because the Government was promising “a flurry of spending commitments and promises to cut taxes” in 2019.
• Warned of the “economic disruption associated with a no deal Brexit“, and claimed it would lead to “a smaller and slower-growing economy in the long run.”
• Claimed the impact of Brexit on the economy would be “worse than Covid” which was responsible for over 100,000 deaths.

Laura Gardiner, OBR Deputy Chief of Staff responsible for policy costings, expenditure, receipts and “fiscal risks“, worked for Bell for six years. In that time she:

• Claimed it “makes sense” to bribe 25-year olds with £10,000 handouts – an £8 billion-a-year policy which was soon swept under the rug, presumably once everyone realised how bonkers it was.
• Attacked the government for “the era of austerity“, and proposed reforming Universal Credit. Learned plenty from her days alongside Bell, obviously.
• Served as a “Lambeth Equality Commissioner“.

It baffles Guido that Richard Hughes was recruited to head the OBR from an organisation, the Resolution Foundation, which has been unremittingly critical of every Tory chancellor since George Osborne. Is it any wonder that Kwasi didn’t fancy having his plans benchmarked by known ideological opponents who favoured staying in the EU and egalitarian redistribution on a gargantuan scale. It doesn’t take a great insight to guess what the OBR will say when a budget that doesn’t align with their values and objectives lands on their desks…

*David Willets, the foundation’s president, is used as a token Tory shield against accusations it is a left-wing campaigning organisation. Guido would not go as far as to say Two Brains is a useful idiot, he is however an ideological fig-leaf…