The gross errors of the OBR are damaging

Taxpayers pay good money to have an “independent” civil service body to evaluate U.K. economic policy and supply forecasts of what that policy will deliver.

In March 2021 they did their usual budget forecast out to 2025. They said inflation would be below 2% until 2025 when it would just reach 2%.  Inflation a year later hit 9%.

If you use the war in Ukraine as an excuse you still have to explain why inflation was at 5.5% in January pre war, 175% over target and more over forecast.

They forecast growth will never be lower than 1.6% a year out to 2025. March to June this year probably saw no growth and growth in Q3 will depend on the emergency cash injections recently announced as budget adjustments.

This shows the OBR/Treasury have models that do not work based on misunderstandings of the economy. This  matters. They give wrong policy advice to the Chancellor. He should challenge it more and act on it less.


In OBR world cutting tax rates leads to a loss of revenue, yet if you cut the  right taxes it stimulates more activity and brings rising receipts. In OBR world if you increase taxes the deficit falls. If you raise taxes too much in reality you slow the economy too  much and the deficit rises.In OBR world if you are running below capacity there will be little inflation. In the real world if you expand money and credit massively you get inflation four and half times target even when below capacity as they judge it.

OBR/Treasury advice is in danger of delivering unacceptably  high inflation and a recession to follow. They have a long record of boom/bust advice. Why do it again?

We could  get similar and some  better forecasts free from the private sector to help inform budget judgements.


  1. DOM
    July 4, 2022

    Good morning

    They’re not errors though I suspect you know that anyway.

    Elected politicians must embrace and speak what they see and what they know to be true otherwise the hell is the point of it all?

  2. Mark B
    July 4, 2022

    Good morning.

    The OBR was set up by the 2010 Conservative Government because the advice they were getting from the Treasury was sub par. Oh the irony. Perhaps this government should set up a third as this might prove lucky ? Or not


    So in essence we have a lot of people in government, The Treasury, The BoE and the OBR who, basically, cannot do their jobs.

    Any reason why we should continue to fund them ?

    1. Iain gill
      July 4, 2022

      I see no reflection on why the COVID modelling was so poor, even after vast resources were thrown at it.

      It’s not just the public sector, it’s also accademia, and some of the big consultancies which peddle this mystic palm reading.

      1. Julian Flood
        July 4, 2022

        Not just economic forecasts, not just covid. Remember Mad Cow Disease? Global warming is the same, confident forecasts that fail and are replaced by much better forecasts in which we can be totally confident, which fail…
        We are about to run into two major problems, both caused by incompetent government.
        The energy crisis/catastrophe/emergency is the result of listening to the Climate Change Committee who simply regurgitate the ‘projections’ of the IPCC climate crisis/catastrophe/emergency (they do projections not predictions and our STEM-illiterate political class, politicians and civil servants, accept them unthinkingly). The coming water crunch* is the result of unrestricted population growth in the South East when the rain falls elsewhere.
        Water from the aquifers of East Anglia is being piped to the rapid growth hub around Cambridge and Perborough. Soon there will be calls for irrigation of crops on the lighter farmland to cease, so we’ll add water rationing to either inadvertent blackouts or energy rationing.

        And we will import more gas, beg for electricity from Europe which is turning back to coal…

        There’s a scene in the film Groundhog Day which pertains. Phil Conners, the forecaster speaks on camera. “You wanna forecast, Princess? I’ll give you a forecast. Its gonna be cold. Its gonna be dark. And it’s gonna last for the rest of your life.” Add food shortages and that looks like a forecast to watch.


      2. Lifelogic
        July 4, 2022

        Indeed but then the financial incentives are so often not to get it right or to serve the public but quite the reverse.

    2. PeteB
      July 4, 2022

      Mark, Agree paying for the OBR to produce rubbish is pointless.

      Either go out to tender with the private sector – selecting the one most willing to adopt a payment model based on forecasting accurate. Or, accept forecasts are inaccurate and stop doing them. A real cost saving plus we managed very well without these fortune teller exercises for decades.

    3. Lifelogic
      July 4, 2022


      The dire chancellor and remoaner George Osborne also set up – The Office of Tax Simplification on 20 July 2010 as an independent adviser to the Chancellor, providing advice on the simplification of the tax system. Either the advice was duff or just ignored by Osborne, Hammond, Javid and Sunak. This as since then tax complexity has probably doubled. Also taxes have further increased hugely with many taxes are now absurdly (effectively) over 100% of profits or real gains. Tax complexity is a large further tax on top of the actual taxes in vast compliance cost, wasted time and investment then not made.

    4. Hope
      July 4, 2022

      If we had a competent chancellor or Chief Secretary to Treasury you would have thought they would correct these errors or sack those who keep on getting it wrong when it costs taxpayers a fortune.

      Better still why has Johnson not recognised your talents and put you in there!

    5. acorn
      July 4, 2022

      The OBR is not serving any useful purpose other than as an entity for politicians to blame for their own incompetence. The Treasury is full of smoke and mirrors departments. The Commissioners for the Reduction of the National Debt (CRND) is one. This “invests” yet to be spent departmental budget allocations, with the Treasury Debt Management Office; such that the government ends up paying interest on its original budget allocations to its own government departments.

      Have a look at page 15 of There is no political force external to the Treasury that could ever hope of reforming it. The colour or creed of any future amateur Chancellor of the Exchequer is irrelevant. The Treasury machine will capture them on day one.

    6. Nottingham Lad Himself
      July 4, 2022

      Just more buck-passing from the ERG instead of their owning the baleful consequences of their brexit and of the Tories’ general house price bubble-pumping.

      1. Peter2
        July 4, 2022

        More lefty twaddle ranting from NHL

      2. miami.mode
        July 4, 2022

        Average house price May1997 £59,000 which became £177,000 in May 2010. Average price April 2022 £300,000. All as per Land Registry.

  3. Javelin
    July 4, 2022

    There needs to be a serious public debate on the quality of “academic” modelling in economics, climate and pandemics and it’s poor quality.

    I have worked in trading software in the City for 30+ years and never seen a CV of a modeller. I simply don’t believe these people are serious software engineers.

    Did you know this so called modelling “software” uses a language called Python named after Monty Pythons Flying Circus. A joke language. Microsoft thought it was a joke after they got their hands on the Imperial pandemic software and found every time they ran it they got a different answer.

    The easy solution is that all the so called modelling “software” needs to be made open source and published and made available in a public website. There is a site called github where this can happen for free. Real software experts can then scrutinise the quality of this software and see how various assumptions change the outcomes of the models.

    It’s a simple culture change that will improve the quality of the software, but in the short term will cause huge embarrassment at Im guessing the “software” is of incredibly poor quality.

    Did you know that in the US the “Plymouth Rock” in Massachusetts stands at “high tide” and was named in 1620. In the past 400 years the level of the tides has not changed relative to the rock, not even by one centimetre!! Yet according to the Monty Python predictive Software it should be 10 meters underwater.

    1. Javelin
      July 4, 2022

      The solution to this problem is very simple. Give software modellers who work for Government (eg Treasury or University) six months to start publishing their software in an open source website (eg github).

      Any Information that has been created by software models, are the software is not published, then the British Government should refuse to use that data. Further they should refuse to buy any academic publication for a university where a computer model has been used and the model has not been published. They should refuse to allow any PhD to pass where the modelling software has not been published.

      This means the Treasury, Climate Change, Astrophysics, Transport, Pandemics, Farming etc etc will all need to improve the quality of their modelling. The quality of Government will also improve as a result.

      This software is driving so many Government decisions that the time has come for it to be published in full. The authors of this software need to be dragged squealing and squeaking into the sunlight.

      1. Sharon
        July 4, 2022

        Thank you Javelin in your information and thoughts. Sounds eminently sensible. We can no longer run our country on poor quality and unreliable modelling.

        I’m still chuckling at the given name of Python from Monty Python’s Flying Circus… sounds perfectly apt!

      2. Sir Joe Soap
        July 4, 2022

        It’s clearly got unnecessarily complicated, when simple common sense beats OBR’s best mate’s best software.

      3. hefner
        July 4, 2022

        Funny Javelin, last time I looked at such codes (whose access is provided as a condition for publishing the related scientific paper (in e.g. the Quarterly Journal of the Royal Meteorological Society)) the code was more likely to be Fortran 95/2003/2008 with modules in C++ than Python.

        And if you knew how to search you might have realised that some are already in GitHub.

        1. a-tracy
          July 5, 2022

          hefner, as you seem to be a bit of an expert in coding, do you believe that the OBR is using extremely accurate, accurate, slightly inaccurate or totally inadequate systems?

          1. hefner
            July 5, 2022

            To me the answer is rather simple: the OBR has tools to make series of forecasts assuming different initial conditions (national and international), different constraints and different scenarios. Then it should be the role of the Chancellor and of the Treasury to decide which one they think is much more likely to fit ‘their grand design’ (that’s assuming they are able to have such encompassing thoughts). To put, as Sir John does, the responsibility on people who at the end of the day are only running tools instead of on those who are supposed to be embracing ‘the overall perspective’ and making the relevant choices is rather curious.

      4. George Brooks.
        July 4, 2022

        Javelin you have hit the nail on the head. The software should be published and if it was or is published a lot would be binned. The standard of software developer in the public sector is low (second or third league operatives) and we had some classic examples of their inability in the early stages of the pandemic which cost the tax payer a fortune.

        Sediment settles to the bottom and the same is true of programmers who can’t make it in the commercial world. Little wonder that their predictions are rubbish.

      5. SM
        July 4, 2022

        Sadly, Javelin, what you describe sounds all too likely.

        It reminds me of the situation that occasionally (one hopes) arises when medical research papers are published after having been through ‘peer review’ – unfortunately, there are occasions when the reviewers are very carefully selected to give the ‘right’ answers.

      6. Radar
        July 4, 2022

        Good comments and I couldn’t agree more, Javelin!

      7. RichardP
        July 4, 2022

        +1 Javelin
        I think you have the solution to all our current problems!

      8. a-tracy
        July 4, 2022

        Javelin, I think that is an excellent idea, they won’t do it, but they should as it is a public modelling system and the public should be able to scrutinise it.

      9. Jon Neale
        July 4, 2022

        Hi Javelin,
        The OBR publish the formulae for their model here (wouldn’t have thought the exact language its coded in will make any difference to the results).
        There’s working papers and descriptions of inputs here

        1. hefner
          July 5, 2022

          JN, I wonder whether Javelin has finally found the obvious error in the OBR’s macroeconomic model code 😉. And has a-tracy started to scrutinise it?

          1. a-tracy
            July 5, 2022

            Not my area of expertise hef but I know some people that can.

      10. Norman
        July 4, 2022

        Basically then, it all just SOPHISTRY – impressive-sounding nonsense used to influence people – it’s become very prevalent in recent decades, whilst wisdom, experience and common-sense judgement are derided.

    2. DavidJ
      July 4, 2022

      Astonishing but perhaps not surprising. I agree with your suggested remedies.

    3. Treve
      July 4, 2022

      Spot on and I fear the same critiicism can be made of the “Climate Change” modellers.
      Most genuine climate scientists & meterologists have been silenced by threats of loss of funding or jobs if they speak put.
      The guy that produced the hockey stick graph of runaway Temperature withdraws from every court case he starts when he is asked to produce the numbers to back his graph. The numbers behind the climate scare mongering are not published for peer review.

      1. hefner
        July 5, 2022

        How do you define a ‘genuine climate scientist & meteorologist’?

        Whether you like or not Mann’s ‘hockey stick’, the actual data of tree rings, lake sediments, ice cores, corals, stalagmites and boreholes exist and have been published. The best compilation appears in ‘Surface Temperature Reconstruction for the Last 2000 Years’. The book was peer-reviewed and was published in 2006, and is available at
        There is a free pdf accessible after registration.

    4. glen cullen
      July 4, 2022

      And the whole point of ‘net-zero’ is the forecast that our oceans are rising….evidence around the world would suggest otherwise, so why do our politicians believe this forecasting nonsense

    5. KB
      July 4, 2022

      Interesting post there Javelin. To add to it, is it not just about software “quality” but also the assumptions that go into the algorithms ?
      One example that comes to mind is that models of the benefits of immigration seem not to include any one-off lump sum for the share of infrastructure and service investment that anyone who takes up residence here receives straight away.
      Computer models simply reflect the mindsets of those that construct them. Yet we ordinary persons are sneered at for doubting the experts.

    6. Original Richard
      July 4, 2022

      Javelin :

      Thanks for your informative posts and excellent suggestion for all modelling software to be published.

    7. ukretired123
      July 4, 2022

      An experienced independent professional troubleshooter would blow these historical models apart and based on my experience especially as they lack integrity and consistency as you say. They are usually written by folks long gone and no one knows how they were designed.
      Input for the model must come from various sources maybe with different assumptions. Presently it is GIGO garbage in garbage out.

  4. Bloke
    July 4, 2022

    Put the OBR on performance-related pay. They’ll then cost nothing.

    1. Ian Wragg
      July 4, 2022

      But they ate performing. The question is who for. The same can be asked of all departments of the civil Serpents.
      It’s certainly not for the UK taxpayer.

    2. glen cullen
      July 4, 2022

      I like it

  5. Nigl
    July 4, 2022

    I guess you have asked Sunak and this post reflects you didn’t get an answer demonstrating once again he is not strong enough and in the grip of his officials as are so many other M.O.S. We hear Javed couldn’t answer questions from his cabinet colleagues following a presentation on the NHS.

    The problem is an increasingly beleaguered PM is so weak he is desperately trying to please everybody. And ex Theresa Mays ministers, I suspect Damian Green is one are plotting to get rid if him. Do they not realise how totally useless she was?

    We read a vision for the future is soon to be published. Could have been written by Gordon Brown.

    The growth plan will outline how public sector investment can boost growth. What rubbish. We know it gets spent umpteen times less efficiently than in the private sector.

    A plan to invest in people and skills. A very tired cliche rolled out every time with little proven return. I have worked in the Sector and close to the CS and I know they are in the grip of the zealots with providers lobbying hard to get their hands on budget, and HMG demanding such high outputs in the contracts that the interventions, although someone gets a ‘certificate’ are no more than a lick of paint. Apprenticeships will probably be rolled out again, useless in the now gig economy.

    No mention of tax. Sunak is hanging to the large corporate investment allowances he is offering but no evidence it will work. Companies are not going to just find a project to get a tax break.

    Corporation tax needs to be cut hard, it will stop any company thinking of moving out and instantly attract investment from overseas. The Treasury is pushing back because they are determined to stay aligned to the EU and Sunak is acquiescing. Another sell out,

    Suella Braverman, the only one with courage to tell it his it is.

    1. DavidJ
      July 4, 2022


    2. Treve
      July 4, 2022

      May’s government cleared Pincher of allegations and May promoted him.

  6. Tony Sharp
    July 4, 2022

    Sir John,
    Just what is the background of the Staffers at the OBR/ Do they actually have any education or training in macro Economics? Are they just career departmental generalists in the civil service who simply follow a ‘book’?
    I was aghast when Chancellor Sunak announced effective tax and NI increases at the start of the year. This was during the cyclical Recovery from the Lockdown Recession the government , not the markets, had caused through their Covid ‘measures’. The inflationary element of the recovery could have been lessened had not the Money printing of the same Covid lockdown policy not been made.

  7. Nigl
    July 4, 2022

    And in other news we read that the supposed guardians of our money have lost 10 billion through social security fraud. On top of the tens if billions the Treasury threw away in Covid Loans.

    Obviously no one loses their jobs so free to make more click ups and so it goes on.

    1. Cuibono
      July 4, 2022

      Until recently I thought that banks etc. were actively trying to distance us from our money ( with a view to snatching it in the future).
      I now read that in fact we have a HUGE security problem ( greatest in Europe) and that many have been scammed out of thousands.
      It might just be easier to put a stop to criminal behaviour rather than requiring us to beg for our money with passwords, codes, brain scans and the like!
      And agree about social security scams….the things the taxpayer pays for!! Unbelievable!

    2. Lifelogic
      July 4, 2022

      Meanwhile NHS waiting lists for treatments are 6.5 million and still rising steeply. Many looking for heart and other treatments only needed due to having taken taken the not very effective nor very safe covid vaccines. This often coerced and for no good reason at all certainly in the young.

      In 2015 the waiting list was 3 million – less than half dentistry as bad too. Highest taxes for seventy years and yet dire and still declining public “services”.

      1. Lifelogic
        July 4, 2022

        Also 22,000 charged/summoned to court but do not bother turn up yet no action is taken as police to busy! What a wonderful criminal justice system we have too. No much of a deterrent to crime is it rather the reverse.

  8. Sea_Warrior
    July 4, 2022

    I have a theory that too few ministers really understand the mechanics of the problems that they are trying to tackle. How many of them have a large multiple-cause diagrams, or ‘fishbones’, on their office walls? And how many of them, at the first inkling of a problem, have the permanent secretary arrange an in-depth problem analysis meeting, bringing in outsiders, if necessary? Example: how long ago did Grant Shapps appreciate that airlines’ shedding of labour would eventually cause a collapse in the vetting process for new-hires? No wonder inflation is back with a vengeance.
    P.S. I gather Starmer is going to lay out his vision of Brexit today. The government had better have a response ready.

    1. Sir Joe Soap
      July 4, 2022

      Starmer will be shown a road back in to the EU. Whatever is said now.

    2. Cuibono
      July 4, 2022

      I wonder if in Germany they predicted a run on wood burners and firewood as a result of their dependence on Russian gas and oil?
      Support for a gas-less and oil-less future through the medium of war?

      1. Hat man
        July 5, 2022

        Cuibono – The run on wood burners and firewood was just one result of Germany cutting off their access to Russian gas oil by imposing sanctions on Russia.

    3. graham1946
      July 4, 2022

      Starmer has no credibility on Brexit unless he is going to say he wants us back in. He never accepted to result of the referendum, tried to get another one and all along tried to de-rail Brexit. Suddenly he has has a Damascene conversion and wants to make Brexit work? He’s just trying to save his job, which will be lost soon enough anyway as he has no policies, no ideas, no convincing arguments and even bores his own supporters. Like the Tories, the Labour Party continue to elect duds as leader and rely on not being the ‘party opposite’ rather than offer any attractive opposition.

    4. Lifelogic
      July 4, 2022

      Very few Ministers or MPs or indeed Civil Servants seem to have any logic, numeracy, science understanding, real understandings of economics (or inflation as we now see), business, efficiency, energy or real & competitive markets. The handful that do seem to be all kept on the back benches.

    5. Nigl
      July 4, 2022

      Spot on Sea Warrior. I suspect zero, appointed for their ability to grease their way through, lick the backside of their sponsor and move on every 18 months before the problems catch them up.

      HMG is allegedly rolling out more learning and skills initiatives. It should start with its own Ministers.

      Grant Shapps. An excellent example. Imposed completely stupid rules on Covid travel, lacking both informed judgment or common sense ruining travel companies, wasting our money and spoiling holidays at the drop of a fickle hat.

      As I have said before I was in more danger in my local supermarket than most European countries. A puff of wind is stronger.

    6. hefner
      July 8, 2022

      S_W, Brilliant (and showing the type of people on this blog): the Ishikawa diagram was a management tool of the 1960s, generally in a graphic form to be put on a wall. Obviously from such a Methuselah old ‘tool’ it is impossible to get any possible interpretation of potential interactions ‘between the bones’.
      I just hope that Sir John doesn’t get his clues from this type of comments on his blog.

  9. Richard1
    July 4, 2022

    Indeed, plenty of forecasts available for free from the private sector. Same with the weather. And much else. Time to go chop chop, we need to make a major cut in the size of the public sector, preferably performance based.

    1. DavidJ
      July 4, 2022

      Indeed Richard.

  10. MPC
    July 4, 2022

    Monetary and fiscal policy have minimal impact in an economy overridden by Net Zero, the growth killer. Economic growth is no longer a priority for this so called Conservative government.

  11. Richard1
    July 4, 2022

    Economist Roger Bootle points out that a major group of beneficiaries from the current inflation disaster are public sector pensioners. Here’s an idea – cap all pension rises in the public sector to 5% pa, retrospectively also, using emergency legislation. We need to teach these treasury/ BoE/ OBR types that inflation is a disaster and that the policies they have foisted on us (ministers admittedly should have blocked them) are ruinous for the Country.

    The huge advantage which public sector employees enjoy with pensions is under-reported and grossly unfair. Now the QE and lockdown driven inflation is forcing yet another transfer of wealth from the private sector to the public sector.

    Let me put it in terms which Boris Johnson might understand – it could also be a good wedge issue.

  12. Wanderer
    July 4, 2022

    It reminds me of the Imperial College Covid forecasts. Why do we keep such awful forecasters? A monkey with a stick to point at a chart with random numbers on it could do better.

    1. Philip P.
      July 5, 2022

      Remember, though, Wanderer that Neil Ferguson, Whitty and co. produced worst case scenarios because the government asked them for worst case scenarios. Not for the most likely forecast or a spread of forecasts. The media gleefully piled in with the Doomsday forecasts because they’re what provided the clicks, viewing figures and copies sold. And many of the general public still believe the Covid horror story to this day.

  13. Iain Moore
    July 4, 2022

    The Resolution Foundation has released a report that shows income growth since 2004 has been 0,7%, where as the figure before that was 2% . The BBC kept mentioning the financial crash, but that happened in 2008 , 4 years after the rot had set in. So what policy did Labour put in place that has seen such a disastrous collapse in income growth? Our national broadcaster didn’t seem to keen to investigate the cause, I wonder what the policy cause is that has the BBC lose all sense of inquisitiveness.

  14. Brian Tomkinson
    July 4, 2022

    Advisers advise, ministers decide.

    1. glen cullen
      July 4, 2022

      I’m starting to doubt that

    2. Mickey Taking
      July 5, 2022

      advisers balls-up, ministers prevaricate.

  15. formula57
    July 4, 2022

    “We could get similar and some better forecasts free from the private sector….” – so no need (in PM speak) to privatize the arse off the OBR, just close it down, today preferably.

  16. formula57
    July 4, 2022

    “They give wrong policy advice to the Chancellor. He should challenge it more and act on it less.” – and very soon, before the recession extends to the Sunak Slump. (It may be too late.)

  17. Cuibono
    July 4, 2022

    As far a predictive modelling is concerned could we be in a worse position if the government had just “waited and seen”?

  18. Bryan Harris
    July 4, 2022

    I like it that our host often gets to spell out the details underlying issues and problems caused by big government but never, it seems, remedied.
    If there were not so many other demanding self created problems, our financial management, or lack of it, would be on the lips of more commentators – and something might get done. Yet here we have a government that is unable to recognize what is important. Ivory towers serve them well.

    Apart from bad decisions, we hear so much of how the tail(civil service) wags the dog(HMG), but again nobody does anything about it.

    Before we can expect real improvement in our democratic establishment, it has to be understood by all that it is truly broken. How much more evidence is required?

    It will take more than a single charismatic leader to put this right – It will require a pandemic level outbreak of integrity and purpose across the entire establishment to make a difference……

  19. William Long
    July 4, 2022

    One of the bigger factors here must be the quotation marks you put round the word ‘Independent’. Being Civil Servants, the staff of the OBR must be fully brainwashed with Treasury thinking. Why though cannot we have a Chancellor who is capable of questioning the rubbish that is fed to him? You would have thought Mr Sunak would have become aware of its poor quality by now, but apparently not. We await news of the tax cuts widely trailed on TV yesterday with bated breath!

  20. […] The gross errors of the OBR are damaging – John Redwood […]

  21. Berkshire Alan
    July 4, 2022

    I have to say I have lost faith in all Government and Local Authority Departments now.
    All we ever hear is failure, failure, failure, with the same old excuse that they are never getting enough money.
    Time for a real strategic rethink on exactly what we should actually need, and expect the Government to provide in the way of services, as present and past Government polices have encroached and controlled much too far into the way we as individuals can run our lives.
    The result is a complete mindset failure for millions of people about personal responsibility, and the value of any sort of work ethic, the value of money and where it comes from;

  22. Denis Cooper
    July 4, 2022

    And yet opponents of Brexit, Rejoiners, are happy to pray in aid the OBR to support their case.

    “Why the OBR is wrong to claim that Brexit will cause a 4% drop in long-term growth.”

    Personally I would be prepared to go along with an estimated one-off erosion of long-term UK economic growth by up to 2% if we had left the EU without any special trade deal, just defaulting to the existing WTO treaties; that is what you get by correcting the EU Commission’s estimate of a 3% erosion, made up of 0.75% for tariff barriers plus 2.25% for non-tariff barriers, for a two-fold overestimate of the latter because the UK gained only half of the EU average from the creation of the Single Market. And I would not be too concerned about that kind of one-off economic cost given the long term trend growth rate of the UK economy is around 2.5% a year.

    However it clearly does not matter to the UK government what the economic truth may be. It didn’t matter to David Cameron who was happy for George Osborne and the Treasury to concoct vastly exaggerated numbers for his “Project Fear”, and it didn’t matter to Theresa May even when it was pointed out to her directly that the man appointed as the EU’s chief negotiator had previously drawn up a report estimating the value of the EU Single Market as about 2% of GDP averaged across the member states, while an independent German source agreed with that as the average but had the UK gaining only half that average, about 1%, and it didn’t matter to Boris Johnson when he was promoting his super Canada free trade deal with the EU which would be worth less than 1% of GDP, a trivial gain for which he was prepared to sell out Northern Ireland.

    The EEC/EC/EU project is above all a political project, aimed at the establishment of a pan-European federation in which the nation states would be subjugated, and for all their public warnings about the dangers of creeping eurofederalism most of those in control of the Tory party over the past six decades have been signed up for it.

  23. ukretired123
    July 4, 2022

    Meanwhile down here on the ground in the real world M4 protests show people are now really angry about continually being ripped off by the costs of everything.
    Sir John has been predicting underlying problem of the group think OBR , Treasury and experts who rely upon dubious computer models but never get forecasts right unlike the modern reliable weather forecasts.
    I alluded to the. Tax-grabbing fuel price here compared with the USA recently. Boris and Rishi think we will be ok to just “Go Walk” and “Go Bike”. Hmm!
    The recent eyewatering billions in” free” giveaways announcement is seen as a cynical attempt to cover over the government and Cabinet mistakes. If they had only listened to our wise host they would have saved the country an absolute fortune.

  24. glen cullen
    July 4, 2022

    Happy 4th July Independence Day
    I just wonder if the USA would countenance still having to follow our supreme courts and sending us tens of billions in tribute every year

  25. Ralph Corderoy
    July 4, 2022

    The Treasury, the Bank of England, and the OBR are all part of the same system which knows Government debt is too high but the markets and public mustn’t fear.

    There are various ways to cope with the over-large amount of debt in the system.

    1. Austerity. (Osborne claimed to be doing it but didn’t do it hard enough and did it for too long.)
    2. Have mass defaults.
    3. Have a debt jubilee, i.e. a cancellation of debt.
    4. Redistribution by tax and spend.
    5. Financial repression, i.e. low interest rates, which sometimes needs capital controls.
    6. Consumer-price inflation.

    Short-term Governments like 4, 5, and then 6 because they’re not still governing when 1, 2, and 3’s benefits arrive. The Government is like a drug addict who should go into 1/2/3’s rehab but that would be painful and what they really want is more 4/5/6 drugs. For as long as the Government can keep excavating the fiat-debt trench, they will, ignoring that the sides will eventually collapse in on us all. It takes a brave politician to attempt to educate the public with the commonsense explanation of we can’t afford what you’ve been promised because you’re not generating enough money.

    A hard money, i.e. a sound money where supply can’t be altered, stops politicians robbing its captive voters by inflating the money supply, encourages saving, and capital investment to increase productivity.

  26. Mark
    July 4, 2022

    Inflation in January was artificially low thanks to the modern day incarnation of price controls known as (Ed Miliband’s – since he proposed it) OFGEM cap. Electricity prices saw stress in the winter of 20/21 as capacity constraints started to bite. The OBR can be excused for not forecasting that 2021 would be a disaster year for renewables in Europe, as they are not the Met Office. However, all the pieces of the jigsaw creating a shortage in oil and gas and electricity through lack of investment as a result of anti fossil fuel policies in major economies and the maintenance backlog caused by pandemic lockdowns were in place. Add a large dollop of QE into an economy undergoing a post lockdown recovery, and inflation is guaranteed.

    Inflation will persist until we address the energy shortage. The news that Mr Biden is trying to shut down a large chunk of US production in the Permian Basin is about equivalent to the shock to global production caused by the fall of the Shah. Add that to reduced availabilities from Russia, and we have the cocktail for a winter of discontent which will not be made glorious summer until we are rid of greens in power in the West.

  27. Denis Cooper
    July 4, 2022

    Off topic, here are some extracts from a speech Keir Starmer will give this evening:

    He will agree with Liz Truss that Northern Ireland should remain legally and economically separated from Great Britain in perpetuity, a kind of condominium with the EU and its local agent the Irish government, albeit that in those regards it is only a partial separation and for the present it is technically not a constitutional separation.

    Actually I increasingly doubt that there is anything anybody can do about this now. This is the price that Boris Johnson was prepared to pay to get the EU to agree to his pathetic little trade deal, not worth 30% of GDP as he claimed in his TV broadcast but probably something like 1% plus/minus 1%, and he is not going to back down on that, and Labour and the rest of the pro-EU rabble in both Houses of Parliament will probably support him on that. If he had been sincere in what he allowed Lord Frost to put in the Command Paper last July then he would have gone straight on to get the new UK laws passed, and an alternative system of export controls set up.

  28. Hugh C
    July 4, 2022

    Endless brilliance from Mr Redwood on all topics. Why oh why is he reduced to advising incompetents on how to do their jobs properly when he should be at the cabinet table getting these things done. What a waste of this man’s talents!

  29. XY
    July 4, 2022

    Both true and depressing in equal measure.

    The original idea of the OBR when Osborne created it was to take some of the political shenanigans out of running the country’s finances.

    Labour routinely misrepresented the figures when in office, so the idea was to make the economic data production become independent to stop them bamboozling the public.

    It seems that the OBR has become aligned to the Treasury, which is itself unreliable – or can onlty be relied on to be both wrong and pessimistic. The idea of the private sector is superficially appealing, but we see so many institutions pursuing and activist/political agenda that it raises the question: Who could the country trust to provide impartial figures?

    One other point – providing the data is one thing, but it seems the OBR is now effectively providing advice/views. Was this intended to be part of their remit? Perhaps that should end?

  30. a-tracy
    July 4, 2022

    Who in the private sector could we get forecasts from? Let’s see if they’re willing to predict the rest of this tax year for free for you to blog about to compare to the OBR’s predictions for this year in a blog post for next April.

    April 2022 – Easter, we now have some schools off for the first two weeks, some the two weeks wrapped around the Easter weekend and some the two weeks after Easter it disrupts the whole months trade, compared to previous years when most people took the week of Good Friday and the week after including Easter Monday.

    May – June – the Jubilee turned into a weeks dead time not just the two bank holidays + the 3rd bank holiday in early May, for many it was a week off 30th May – 3rd June, for many it became two weeks from 2nd to 15th June off with a drop in trade.

    Nothing surprising there to reduce UK turnover was the levels of reduction around those events predicated correctly by the OBR?

    Reply Various private forecasters publish the main numbers of their forecasts

    1. hefner
      July 5, 2022

      a-tracy, you might want to look at ‘Forecasts for the UK economy: A comparison of independent forecasts’ on, 16/03/2022 .

      1. a-tracy
        July 5, 2022

        thank you.

  31. Kenneth
    July 4, 2022

    Wouldn’t it be more cost effective to sack the OBR management and disband the department?

  32. No Longer Anonymous
    July 4, 2022

    I’ll make one prediction which will be true:

    An utter cull of Tory MPs in 2024.

  33. Pauline Baxter
    July 4, 2022

    Yes Sir John. Undoubtedly you are right in what you say. You always are right on Economic and Financial policy.
    BUT as I’ve said before:-
    Don’t YOU feel as depressed, and disheartened, as the clear thinking VOTERS do at the moment?

  34. Denis Cooper
    July 4, 2022

    Off topic, Keir Starmer thinks the problems with the Irish protocol can be fixed through “hard work”:

    I don’t think so; and the central reason for my disagreement is illustrated by the graphic at the end of that article, which completely ignores the fact that some – maybe half – of the goods exported from Northern Ireland across the land border into the Irish Republic have actually been produced in the province, not brought in from Great Britain or anywhere else outside the province.

    But I pointed this out five months ago:

    and it made no difference then, and so it is unlikely that it will make any difference now.

    This all goes back to George Osborne’s “Project Fear” lies told in April 2016, before the referendum:

    with a potential loss of GDP close to 10% if we moved to WTO terms for exports to the EU worth 12% of GDP.

    Of course these lies would not have mattered so much if we had voted to stay in, but once we had voted to leave they became hugely damaging because they told the EU and the rest of the world that we were in a weak position, supplicants, and so they conditioned everything that happened afterwards.

    I don’t suppose that will much bother George Osborne, for all I know he may even be proud of what he did.

  35. StephenS
    July 4, 2022

    The OBR is one of the first things that should be cut. Whilst I was at it, I’d say that Central Banks setting interest rates has worked as poorly as when politicians were in charge. I prefer democratic accountability myself.

    1. anon
      July 5, 2022

      If spending money in excess of taxes raised is required then it should be borrowed or effectively printed with no coupon and spent or given directly to individuals to spend with restrictions.(debt paydown first).

      Politicians pipers have an eye on the election cycle hence the organs of government follow the pipers tune.
      Should not the organs be incentivised and punnished dearly if they get forecasts wrong.

      Similarly it seems fair to me the long term pay of MP’s, Cabinet, Senior CS etc are exposed to inflationary consequence in renumeration and pension risk. Payrises for MPs and Seniors only allowed at a general election or bye-election.
      Perhaps a cap on the maximum defined pension allowed to be accrued equivalent to the MPP scheme limit (£1m) with no indexing for sums greater than the average private sector pot.

  36. Geoffrey Berg
    July 4, 2022

    Complaining about the OBR and the Treasury being wrong now and in the past is pointless while Rishi Sunak is Chancellor. Sunak claims he believes in lower taxes and a low tax economy. Personally I would give him the benefit of the doubt about not being a liar but that is overridden by his not being up to the job and dependent on his Treasury advisers and in the pocket (like most politicians when they get into some office) of his civil servants.
    Anyhow Sunak should be replaced by somebody who would stand up to the Treasury to enact lower taxes and so promote growth. I believe John Redwood would (and I favour him) but I think another alternative could be Jacob Rees-Mogg. Anyhow a change of Chancellor is essential.

    1. Geoffrey Berg
      July 5, 2022

      Glad Rishi Sunak has resigned now and Sajid Javid too (another Minister not up to the job) but that is no reason at all for Boris Johnson to resign. Boris is yet again being vilified for things others aren’t even criticised for (Theresa May first promoted Chris Pincher and both Labour and the Liberal Democrats have previously thought it quite alright to promote and keep alcoholics in leadership positions).
      Besides the Conservative Party even amid multiple global crises that have damaged living standards in mid-term are still doing better in opinion polls and local elections than it did in both the 1997 and 2001 general elections, buoyed by noticeable and very personal admiration and support by a substantial minority of people for Boris Johnson personally. Without him Conservative support would soon sink further down.

  37. glen cullen
    July 4, 2022

    All forecast modelling for HS2 will be proven wrong ….mark my words

  38. Iain Gill
    July 4, 2022

    you know when Jeremy Clarkson tweets about why are we all putting up with a government like this that something has got to change. this is not the lefty liberal press. this is the non politically correct reality out in the real world.

    I suggest somebody tells the PM and cabinet.

    1. mancunius
      July 5, 2022

      Jeremy Clarkson – like so many who have suddenly developed highminded disapproval – is a dyed-in-the-wool remainer, and is hoping for a remainer to replace Boris.
      And Clarkson is not exactly a moral compass to follow: even Boris has never felt the need to lash out and punch somebody when the cook stops serving hot food.

  39. mancunius
    July 5, 2022

    The OBR is only there to give innumerate chancellors the opportunity to hide behind an ‘expert’ and avoid developing any economic strategies or taking any decisions of their own.
    In fact the ex-BBC correspondent Cellan-Jones has actually asserted that to criticize the OBR (as Jacob Rees-Mogg has done) is ‘to imply he has no confidence in the Chancellor, who relies on the OBR in framing the budget’.
    So, the Treasury is just more political painting-by-numbers – paid more and more, do less and less.

    1. Mitchel
      July 5, 2022

      See George Osborne!

      1. mancunius
        July 5, 2022

        Indeed: I had him in mind as well.

  40. Original Richard
    July 5, 2022

    It is only necessary to read the historian Robert Conquest’s second and third laws of politics to understand the OBR and all institutions funded by the taxpayer.

    1. hefner
      July 5, 2022

      Interesting, thanks OR: 11/07/2008 ‘Robert Conquest’s Three Laws of Politics’.

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