The Treasury ‘worships at the alter’ of the OBR, claims Tory MP

The Treasury ‘worships at the alter’ of the OBR, claims Tory MP
Georgia Pearce

By Georgia Pearce

Published: 10/01/2024

- 07:28

Conservative MP Greg Smith has claimed the government is confined in a ‘straitjacket’ by the Office of Budget Responsibility and said the Treasury ‘worship at the alter’ of every forecast they make.

Speaking on GB News he said:

“The public out there would be forgiven for thinking that the people they elect to represent them to form a government will make all the decisions on taxation and spending.

“But the coalition government put in place this thing called the OBR, The Office of Budget Responsibility and it's like a straitjacket because, essentially, the Treasury worships at their altar, and takes their word for every forecast they make.

“And the decisions on how much we can spend, how much we can give people back through tax cuts, is entirely dictated by the forecasts and the predictions they make.

“There's just one problem with that: They’ve never been right.

“The report that my organisation, Conservative Way Forward, published today shows that since 2010, when they were set up, they have been £630 billion out when it comes to debt forecasting, public sector debt forecasting and they'd been £558 billion pounds out when it comes to growth forecasts.

“So how on earth can the Treasury make good decisions on behalf of everybody in the United Kingdom when we've got this straitjacket around them, telling them duff information?

“It has become almost politically impossible in the current climate to do anything without the OBR giving the nod and a wink.

“What we're calling for today isn't the abolition of the OBR, it is straightforwardly to say there needs to be other people in the room; other forecasters, other academics, other economists, other organisations.

“This is so it’s not like somebody going to buy a new kitchen, just getting one quote and saying, oh, that's fine. I'll pay you £45 grand for that when there are other people out there that will say they can do it for £10,000.

“We've got to have that plurality of voices, of real economists in the room. Of course, they're real economists, but they've got to stand up to the record of never ever actually getting it right.

“There is no one out there that can accurately - to every pound and pence - predict what is going to be required on debt, what is going to be required on spending: you never know what is around the corner.

“But by just relying on one source, one set of economists, one organisation, that's the problem.

Mr Smith described Labour’s policy of giving the OBR a bigger role as “absurd.”

“That is classic, putting your head in the sand trying to pretend everything will be alright if you devolve it to somebody else to tell you what to do.

“The Labour Party taking an organisation that has now statistically been proved to be wrong every single time they've made a projection and the Labour Party saying, ‘we’re going to go with the guys that are wrong."


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