Treasury braced for figures demolition
By Alex Stevenson
Officials within the Treasury are awaiting the launch of the Office of Budget Responsibility, when George Osborne is expected to tear apart its record of economic forecasting.
The chancellor spent much of his time on the opposition benches attacking the accuracy of his predecessor Alistair Darling’s figures.
The Labour chancellor was repeatedly forced to lower his forecasts as the Treasury overestimated the economy’s capacity for growth.
Monday sees the launch of the Office for Budget Responsibility (OBR), a body originally proposed in the Liberal Democrat manifesto which has now been adopted by the coalition government.
It will assume responsibility for providing independent figures for economic forecasts. Mr Osborne is expected to imply heavily that under the previous government the figures were shaped to help Labour’s agenda.
Mr Darling was in bullish mood before the OBR’s first figures, telling the Mirror on Sunday newspaper he wanted to see David Cameron say sorry if the figures showed debt figures were not as bad as he had previously stated.
“If figures turn out to be better than I forecast, Cameron will have misled people,” he said.
“That’s an extremely serious charge to lay against a prime minister but we will be due a very big apology and I’m going to get it.”
The OBR, which is to be enshrined in law, will issue its first forecasts on Monday. It is expected to retain the one to 1.5% growth prediction for 2010 but downgrade the forecast of growth of up to 3.5% for 2011 contained in Mr Darling’s pre-election Budget.
Economist David Blanchflower told Sky News on Sunday that a failure to invest in the economy meant the risks of a double-dip recession were greatly increased.
“The issue is: where is the growth coming from in the economy?” he said.
“It is not going to come from the public sector and I see no evidence at all that private firms are investing or hiring.”
Mr Osborne will deliver his emergency Budget next week on June 22nd. According to the Sunday Times its moves could include a second five per cent hike in alcohol duties.
