‘Independent’ OBR Chairman’s Love-In with Left-Wing Torsten Bell

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…

mdi-timer 18 November 2022 @ 12:20 18 Nov 2022 @ 12:20 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Kwasi Moves Medium-Term Fiscal Plan to 31st October

Kwasi Kwarteng has written to Treasury Select Committee Chair Mel Stride to confirm the inevitable: the Medium-Term Fiscal Plan, and the accompanying OBR forecast, will be published early, in an attempt to exorcise the demons released by his last announcements. They’re now set for 31st October, having initially been set for 23rd November – a potential Nightmare Before Christmas. Obviously he wasn’t content with spooking the markets just once…

Will Truss stick to her libertarian guns? Or will the event be more of a Blair Witch Project? You’ve heard of trickle-down, now get ready for trick-or-treat…

mdi-timer 10 October 2022 @ 10:02 10 Oct 2022 @ 10:02 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Another OBR Analyst Transferred from Torsten’s Resolution Foundation Supports Massive Tax Rises

Earlier this week Guido reported on Office for Budget Responsibility’s (OBR) not-so-independent senior leadership: how two of Torsten Bell’s former colleagues from the Resolution Foundation (RF) now pull the strings at the quango expected to bless the government’s fiscal policies. It turns out there’s a third we missed…

Cara Pacitti, the OBR’s Senior Fiscal Analyst, also spent two years as an economist at the Resolution Foundation, where she worked alongside her future OBR boss Richard Hughes on one paper assessing the “damage” of a no-deal Brexit, and another which claimed “tax rises tend to harm the economy less than spending cuts“. The latter paper, “How to support the economy today and repair the public finances tomorrow”, may as well have been drafted by Gordon Brown. 

Here’s a flavour of what it proposed:

  • Public support is necessary and so taxes on corporate crisis windfall profits should be considered – which is Labour Party policy.
  • Freezing tax thresholds and raising the Corporation Tax rate should be seen as low-hanging fruit for raising revenue – a massive stealth tax on individuals and a jobs destroying burden on businesses.
  • Reforming wealth taxes can improve the functioning of the tax system and raise significant revenue – the Corbyn agenda.

So that’s three senior members of the OBR who are about to assess a budget which obviously runs contrary to their declared ideological objectives. The Resolution Foundation has never seen a tax it doesn’t like, is run by the Labour Party’s former policy chief and advances an agenda that is socialistic. How is it that out of the thousands of economists turned out by British universities every year, the OBR over and over again keeps hiring senior economists from the one think-tank run by Labour’s former policy chief? What are the odds?

mdi-timer 6 October 2022 @ 12:26 6 Oct 2022 @ 12:26 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Office for Budget Responsibility’s Not-So-Independent Leadership

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 handoutsan £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…

mdi-timer 3 October 2022 @ 16:35 3 Oct 2022 @ 16:35 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
UK Debt Interest Costs Soar to August Record

Interest payments on UK debt soared to an August record of £8.2 billion last month, with public sector borrowing hitting £11.8 billion – nearly double the £6 billion predicted by the Office for Budget Responsibility (OBR) in May. Although still £2.6 billion less than August 2021…

Reacting to the figures this morning, Chancellor Kwasi Kwarteng emphasised he’s sticking to the plan: go for growth. He said:

“Strong economic growth and sustainable public finances going hand in hand. As Chancellor, I have pledged to get debt down in the medium term. However, in the face of a major economic shock, it is absolutely right that the government takes action now to help families and businesses, just as we did during the pandemic.”

The mini-budget is set for this Friday, where cuts to stamp duty, corporation tax and national insurance are all on the menu. The rumoured one percent cut to income tax is now expected to be held back until a full budget further down the line. Before all that, BEIS is set to announce its big plan to cap energy costs for businesses at around 9am this morning. Don’t expect that borrowing figure to go down any time soon. Stay tuned…

mdi-timer 21 September 2022 @ 08:59 21 Sep 2022 @ 08:59 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
IMF Says UK GDP Growth Mid-Table for G7

Anyone following the arguments will have heard the Remainers’ refrain that the UK has gone from having the fastest GDP growth in the G7 to the slowest GDP growth in the G7. That has never rung true to Guido. The latest IMF forecast – which should still be treated with scepticism – puts UK GDP smack bang in the middle of the G7 growth table. Behind Canada, the US and Germany, ahead of France, Italy and Japan for 2017. Treat this with scepticism because the IMF predicted the UK would be in the depths of a recession by now…

Other forecasts are even better; the German Council of Economic Experts predicts German GDP growth will be 2% in 2017 and Britain’s equivalent the OBR predicts UK GDP growth will also be 2%. Hardly the hit you read about in the FT…

GDP forecasts are unreliable approximations, it is fair to say the UK economy is not racing away, it is nevertheless growing and the interest rate rise from the Bank of England is a sign that the MPC think growth is far from weak. Phil Hammond’s budget needs to drive home good economic news to boost confidence…

mdi-timer 9 November 2017 @ 10:50 9 Nov 2017 @ 10:50 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
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