Text of my latest Lords speech
The OBR is set up to fail. The Treasury asks it to perform an impossible task. As someone who has in past jobs had to advise and comment on economic forecast models, the one piece of advice I would give is to never have a spot forecast for something as difficult as a deficit or an inflation rate five years out. To make sure the OBR fails, the Government set it the task of forecasting without allowing it to make any variations to policy. We all know that, over a five-year period, there is going to be at least one general election, and sometimes Governments get so unpopular that there can be a very major change of Government, with a change of policy. We also know that, over a five-year period in this impatient world, Prime Ministers often get fed up with their Chancellors, or parties get fed up with their Prime Ministers, so there can be changes of personnel and a series of changes of policy from that as well. So, it is a totally unrealistic assumption.
What has the OBR done with its problems this time? The OBR tells us that inflation will be a very timely 2% in every year of the last four years of the forecast. I wish it was so, but experience says it is unlikely. The OBR says that the oil price will gently gyrate between $62 and $67 over the forecast period. I know that these are annual averages, so that reduces some of the volatile swings that we are seeing. But, again, that is a heroic or inaccurate forecast. I suggest that there will be considerably more volatility. If we got an early end to the war and things develop more favourably, you could even end up with considerably lower oil prices. In the meantime, obviously, we are all extremely nervous, the war continues, there is more disruption of oil trade and oil prices will stay very high.
One of the things that I fear the forecast is right about is that our own production of gas will halve. I fear that it will under current policies, and I add my voice to those who have already eloquently said that we should stop all this self-harm and get our own gas out, with more better-paid jobs and a lot of extra tax revenue—and, above all, less world CO2, which is the main preoccupation of the Government. What is not to like? The forecast also says that our oil production will be down by about a third. That, too, is subject to the same analysis, and it would be much more sensible for us to deliver our own oil.
The worrying thing in the forecast, which has already caused some alarm in this debate, is that the OBR thinks that the cost of government borrowing is going to rise in every year of the forecast. We should remember that this is from quite a high base by recent past history, because, over the last 15 months, under Chancellor Reeves, the Government have been paying a higher rate of interest for longer-term borrowing for the whole of the 15 months than on the worst day’s spike under Liz Truss, which they regularly condemn as being an unacceptably high level of interest rates. This OBR forecast says that the interest rates are going to be even higher progressively, in a gentle upwards progression, over the whole forecast. Clearly, the OBR is worried, as we all should be, by the weight of debt already issued and by the progressive increase in the amount of debt over the forecast.
This brings me to my advice to the Government. They should change the remit of the OBR to concentrate on years 1 and 2 of the forecast, where there is more chance of getting it right, and they should amend their fiscal rules again. I know they are bringing it down from a five-year fiscal forecast rule to a three-year fiscal forecast rule, but many of the arguments against five years still apply to three years. The number is invented and will not actually ever take place. Year 5 or year 3 never comes, because it is a rolling forecast, so, in effect, there is no control over the deficit. We need a control over the deficit in years 1 and 2 that is real and biting, at least by moral shame and preferably by government decision. Then I think they would find it easier to keep the interest rates under control.
There was a touching ceremony in this very Chamber last week when the Government advanced their legislation to increase income taxation by reducing the generosity of certain pension-saving allowances. The most remarkable thing about that legislation that we were asked to approve was the date of its introduction, which is to be 2029 to 2030. Why choose such a late date? Indeed, it could well be after the next election, and there could even have been a change of government by then, who might not particularly want that legislation. I assume it is great Treasury intelligence and cleverness, because that, of course, is the control year it is currently on for controlling the deficit; and so clever people in the Treasury invented a tax increase, which actually has, according to the OBR, the magic property of a large increase in tax in year 1, and then it halves for all subsequent years. You therefore get the maximum deficit-breaking effect from putting that tax in in year 5 of the forecast, probably neatly after the general election.
This is creative accounting on a grand scale, and it is a surrogate for the real job of getting that deficit down, so I would suggest to the Government that they look again at their fiscal rules. In all the years we have had OBR forecasts of deficits and fiscal rules, we have seen a mushrooming of deficits and debt under successive Governments of all parties, so it is now trebled over the OBR period. Let us therefore have an OBR with a bit of bite. Let us give it a bit of proper independence. I know it is staffed with civil servants, and they work very closely with the Treasury, but it needs to be independent enough to accurately forecast the deficit in years 1 and 2 and to help the Government control it.
March 19, 2026
The OBR was established within days of the Coalition Government coming to power in May 2010 by Osborne so probably should be closed down and reversed – like almost everything else this appalling Chancellor did.
Not easy to correctly predict these things indeed impossible really. Predicting the climate in 100 years even more absurd.
In your video last post you suggest natural wastage rather than redundancy in the state sector well perhaps given the absurd employment laws and high redundancy costs but a sensible government would ditch these and go for easy hire and fire. Much more efficient as you can get rid of the dross and keep the quality people.
March 19, 2026
See also the Peter McCormack “Net Zero is a Scam” Video with a pleasant fun northern lad & Nuclear Expert Exposing the lunacy of Net Zero and out energy policies.
March 19, 2026
His book is “GOING NUCLEAR: HOW THE ATOM WILL SAVE THE WORLD” Dr Tim Gregory.
March 19, 2026
The OBR was set up by Osborne to give some semblance of legitimacy to his ruinous policies
It has been spectacularly wrong on every forecast it has made
It is staffed by Treasury approved people who use its ridiculous forecasting to hike taxes and benefits.
It should be abolished immediately together with dozens more useless Quangos
March 19, 2026
The OBR and Government generally just ignore how people react to tax changes – simplistically/idiotically assuming that if you double a tax rate for income or stamp duty or Corp. Tax say you will double the tax take. Actually the tax take will not only not double it might even decline plus the tax take from other taxes like VAT will also decline as people will have less left to spend. People change their behaviour, leave the country, take tax advice, go on benefits, work in the black economy, work fewer hours, move there HQ to Dublin or their wife to Monaco…
March 19, 2026
Yes, the OBR is part of the establishment, so having a pop at them is futile; they do what they are told. Is Lord J confusing forecasts with assumptions in the data?
It’s a snapshot; read it like an electoral poll, and give it the same weight.
Here’s a forecast, our economy is unable to withstand any exogenous financial shocks so we are heading for serious economic breakdown. This Labour government isn’t remotely equipped to cope so we’re going to have a political upheaval as well. Take precautions.
March 19, 2026
The aim of Osborne with the OBR what prob. to try to con lenders into lending to the UK more cheaply (as will Gordon Brown’s disastrous private finance initiative (PFI) deals. I do not think that most of the money men are quite so easily fooled.
Why will Hinkley Point C cost about 20 times more per MW capacity than the ones recently build in the UAE or South Korea? Red tape, politicians on the make, the legal and planning delays, DEI, the equality act, mad employment laws, Net Zero, fish protection discos, English Nature… I assume.
March 19, 2026
Correct. A Blu-Labour Policy, from a Not-a-Conservative Chancellor.
March 19, 2026
I see wind has done it’s vanishing trick once again providing only 1.5gw. We are Importing a massive 22% of our electricity today at £105 per mwh.
Sadly this is necessary because due to Milibrains forensic analysis we only have 2 days gas reserve. Better get some candles in.
March 19, 2026
I see OFCOM has tried to fine American 4Chan half a million quid for breaching their guidelines. There lawyers have responded with a picture of a Hamster and the second word is OFF. Since when did Ofcom grant itself the powers to fine sovereign nations.
They should be the first Quango to go after the OBR.
March 19, 2026
Unfortunately..Qué Sera!
March 19, 2026
Good morning.
We have here been talking about the OBR and others QUANGO’s for as long as I can remember. What we do not seem to talk about are the solutions to said QUANGO’s and the OBR in particular.
The OBR really does typify the State. Unable to achieve what it has set out to do without consequences. Nowhere in the Private Sector would this be tolerated. You’d be either facing massive restructuring or, bankruptcy. Both of which are ‘correcting’ factors.
The only solution to me is this. We, or the government, managed ‘before’ the creation of the OBR, so it stands to reason that we can save an awful lot of money if we got rid of it.
March 19, 2026
Indeed get rid of it and use the money saved to reduce taxes do the same for about 50% of the state. But abolish large redundancy pay offs first – a months pay off is plenty. With easy hire and fire there will be far more new jobs on offer too.
March 19, 2026
@Mark B – with in that you end up with spending taxpayer money with no accountability or responsibility attached. The aim of Socialism, to tear down the purpose of Democracy.
March 19, 2026
The root cause of your OBR problem seems to be the collusion whereby government can impose pretty well any measures “impact-free” 4 or 5 years out and the OBR then reports that, based on those, everything in the garden is coming up roses.
I’d say a 5 year plan is important and the answer might be to get the media to explain better to us the impact of government measures 4 to 5 years out. Also an obligation for the OBR to lay out in stark form the consequences of government policy and assumptions 4 or 5 years out on peoples living standards.
March 19, 2026
is just the cherry on top of the icing when it comes to the economics of this government.
With budgets that budget nothing, being inventive about future positions makes a farce out of economic modelling. We all know how badly the economy is doing, but our chancellor expects it to take care of itself with a little help from imagined forecasts.
This won’t end well.
March 19, 2026
I agree with all of your overview John. The only area I question is giving the OBR additional power or perhaps I should say some power.
The OBR is tasked with forecasting. That forecasting is clearly impossible because it is based on past fiscal decisions it has certainty about, plus and more important, future decisions it knows nothing about and never can.
With that being the reality, what is the point of a government department staffed with crystal ball gazers?
The Mystic Megs of the OBR are not incompetent, they are simply a comfort blanket, they are placed in the position of fall guy for government. With that being the case, can we reduce the OBR down to maybe just ten people. The purpose of their existence would be maintained i.e. the fall guys and with ten people there will be enough in the office to cover for sickness and holidays…..
March 19, 2026
With European countries lining up behind the UK in refusing to help the USA keep the strait of Hormuz open they are shooting themselves in the foot.
We badly need the oil that isn’t flowing, and will suffer due to this bottleneck, but our leaders are so determined to put 2 fingers up to Trump that they risk the price of oil going even higher and causing us all more grief.
Now that is what you call being irrational. They were just waiting to show disdain for the USA president, but this insult will hurt us because the USA is not dependent on the strait of Hormuz being free of bombs and mines
Perhaps Trump was expecting this failure to help, but it does give him the opportunity now to re-evaluate NATO and maybe even stop subsidising it for the rest of the world.
Starmer and co keep telling us this is all about international legality – It is not, it is all about the push for a global reset and a single world government, as well as all the nasties involved in destroying the West with net-0.
March 19, 2026
The anti -Trump Democrat and European politicians and media are running a campaign against the Iran war, claiming that it is already lost and causing an economic catastrophe. They want to get back to their old order and rules that Trump has disrupted. The war has given them cover for their economic mismanagement.
But if we look at alternative news from Israel and the US military the position is very different. They have already achieved the main aims of destruction of the Iranian bomb and missile manufacturing industry. The leaders of the unpopular Revolutionary Guard and mullahs are in their heaven and the limited number of missiles and drones is being identified and destroyed. The economy is at a standstill. The underground missiles threatening that Hormuz strait are being eliminated but this will take some time. Oil is being exported by 2 pipelines and the rest of the word except Europe is free to buy Russian oil and gas. Only Russia hating politicians like Starmer are still sending borrowed money and weapons to extend the lost Ukrainian war. They are risking an end to American support for Nato. In a few weeks they will be exposed.
March 19, 2026
Yes Reality is a sod to ignore.
March 19, 2026
@Steve Bullion – in another life a Parliament, its Governments lining up to refuse to protect their shipping, trade routes and citizens in international waters – would be unheard of. The condemnation and force would pile in.
The selective using of the non-existent International Law. Where are all these International Lawyers now? (the simple answer is there is no money for them so who cares)
March 19, 2026
I agree with you. We have to tread very carefully here. And eat humble pie where necessary to keep oil stable etc. But at same time some of those on right here in the UK have to stop putting Trump on a pedestal. He’s just another Ozymandias in politics – one of many in history. And nothing good will come of his politics in the long-term and overall for USA or UK. Putting him on a pedestal feeds his madness.
The best we can do is not do anything to be rude to him. And just patiently wait until his presidency is up.
March 19, 2026
Trump masterfully made Strait of Hormuz “somebody else’s problem”. US oil is at $100, while Asia oil (dependent on Hormuz) is at $150.
Want Hormuz opened? Send ships to help. Otherwise, do without or in the case of Britain, drill baby drill.
March 19, 2026
I agree Lynn, we need to drill here.
Regarding ships, as far as I believe we no longer have mine-sweepers. And even if we did they’re not designed to be used with bombs and drones reigning down on you. And take time to deploy. So that’s just a fundamental technical error.
And it’s not asking too much to consult with your allies before going to war.
OK so having said all that how is this particular war (its planning or lack of) going to help the USA and the UK geopolitically and at what cost).
x
March 20, 2026
JR said we had a minesweeper in the Strait which we withdrew. We also had a carrier force able to be deployed. We share Diego Garcia with the USA but refused to allow them access to any of our airfields including those in Britain.
Warships are designed and intended to be deployed when there is a war.
Unbelievably the location of the French carrier has this morning been revealed by a sailor wearing a Fitbit watch while he ran on deck. How moronic is the European Military? The Israelis have published the scan and are laughing at the French, Macron of course surrendered before even joining the war!
No wonder the Americans and their lone ally, Israel, no longer share any intelligence at all.
The Terrorist Islamic Regime which had enslaved the infidel Persian nation (and 52 others and has its eyes on the UK) and funded almost all western terrorism, and which ADMITTED having enough material for 11 nuclear bombs, has been obliterated.
If you can’t see any benefit then frankly I can’t explain the benefit to you.
If you can’t recognize the 22 years of planning for this war, the courage and the genius, the LOVE that people who go to fight to protect us – NOT FRIENDSHIP, LOVE, then there is no getting though to you.
You sound like Bercow – when he was a candidate and looking for a seat he made the same interminable whining speeches culminating in the call to ‘vote Conservative’ as the universal palliative.
March 19, 2026
OK so we both agree Lynn, drill. But how much profitable oil is there to extract. Lifelogic might know better but only a few months worth. What we can say more clearly is that it is only a bonus. Not a replacement for our main oil supply from the Middle East (not sure what % that is but we can both agree it is significant). So Trump has thrown us into a completely precarious situation. He is no friend of the UK.
March 20, 2026
We have TRILLIONS of £ worth of oil, decades and maybe hundreds of years worth.
The price dictates the ‘amount’ of oil we have that is viable to extract. The higher the price the more oil is viable.
Trump and Israel have saved the Middle East and the world from the terrorist State that funds most of the terror in the west.
I don’t know how old you are. I was better informed on current affairs than you are now when I was 10.
March 20, 2026
When I was 10 I was smoking cigarettes, going to the races, climbing trees and having a laugh. No way was into politics then zzzzzzzzz!
March 19, 2026
The OBR (and the Treasury) are experts at one thing: kicking the can down the road.
The problem is, we are rapidly running out of road and they haven’t a scooby-doo what to do about that.
March 19, 2026
To commemorate the 250th anniversary of Adam Smith’s The Wealth of Nations, the Adam Smith Institute (ASI), is bringing the foundations of modern economics to a whole new medium.
They have created a publication aimed at the politicians of the age with their very short attention spans, in the form of a comic – It actually makes good and interesting reading! If only they would read it.
https://www.adamsmith.org/books/preview-adam-smiths-the-wealth-of-nations-a-graphic-novel?utm_source=substack&utm_medium=email
March 19, 2026
@Steve Bullion – what is missed is that our ‘modern’ politician doesn’t do economics the are about self and personal ego. Spending other peoples other than for election bribes is so far of the map, it doesn’t matter and of course that money is always readily available from the taxpayer
March 19, 2026
I’m sure Adam Smith needs to be ‘decolonised’, like Shakespeare – our Colonizers demand it!
March 19, 2026
People have not yet appreciated just how much the consumer price of energy is going to rise, thanks to the megalomaniac in the White House’s war on Iran
The belligerents have now started bombing each other’s “natural” gas infrastructure, oil loading ports, refineries, storage facilities etc
The price of wholesale electricity is closely tied to the cartel price of gas, as the UK generates 40% of it’s juice using CCGT. This morning gas is up again – more than 20%
The wisdom of moving to renewable sources must now be apparent. Banging the fossil fuel cartel’s drum for them is revealed – yet again – as absolute idiocy. Our economy cannot continue to allow foreigners to regularly hold us to ransom over the oil price.
Without humungous subsidies that we cannot afford, there are no economically extractable hydrocarbons left in the N Sea. We have no choice but to move to cheap onshore renewables and grid scale battery storage ASAP
March 19, 2026
SG
What has your post got to do with today’s lead article about the OBR?
March 20, 2026
Norway has no trouble finding and extracting economically viable hydrocarbons. So could we.
The occasionally useful windmills and the far less useful solar panels are massively subsidised and only provide intermittent and unreliable energy.
We are sitting on coal, oil, gas and shale gas. We should use it …. all of it.
March 20, 2026
We already had energy at 4 times USA prices due to Mad Miliband’s (and Cameron, May, Boris, Carrie and Sunak’s renewables and devil CO2 gas religion. Mr Gold!
March 19, 2026
My understanding was the OBR was set up by the Chancellor George Osborne to absolve him from managing his department, the Treasury. If he thought suddenly the Treasury was not up to the job after 400 or so years under the management of the Governments appointed Chancellor – he didn’t seem to question who was in charge of management.
Was another expensive QUANGO (jobs for the boys that can’t get real jobs) the answer or was it himself. The bit left unanswered is that now 16years on with no reliable, usable forecasts, just consumption of taxpayer money (all £4.5million per year) why is no one taking responsibility?
Previously the Treasury managed by Parliament its Government, with its Chancellor had responsibility for managing the results, the budget.
The question that is not asked, or the figures are well hidden in the 16years why in all that time are its results considered to be generally wrong? and then its the same cabal consuming taxpayer money?
March 19, 2026
My perennial question, is Parliament, its government ‘gives’ taxpayer money to off books entities, yet the taxpayer has no choice no say and can hold no one responsible. They appear to be beyond Parliamentary oversite and control. That is an irresponsible Parliament, allowing uncontrolled spending of hard-earned taxpayer money by uncontrolled unmanaged entities.
Parliament has or chooses to forget whose money they are supposed to be overseeing and holding the spenders to account on, ensuring real quantifiable results for the benefit of all.
An inefficient Parliament that has lost its way and purpose. For all it matters maybe we should get back into the EU, let them run the Country more than the do now and get shot of Parliament and save some money
March 20, 2026
According to Google, the EU requires member states to have independent fiscal institutions (IFIs) to monitor budgetary policy. I wonder, therefore, if Osborne was complying with an EU directive by creating the OBR?
March 19, 2026
The OBR is another totally useless Quango, that any sensible government would shut down immediately. It is. a perfect example of the Quango nonsense. Once they are set up they become impossible to shut down, expand in every way possible and are a constant money pit. Why have the OBR when we have the Treasury and BOE, who also produce forecasts? Unnecessary duplication and cost, the classic government approach.
We need a ruthless government to really get a grip, to have a real bonfire of the Quangos, and make parliament do its job.
March 19, 2026
As you point out, in the end it is the Treasury which is in control and determined that that should remain the case. So the prerequisite for the common sense that you are suggesting is a Prime Minister and Chancellor who both have the character to stand up to their Treasury advisers and insist that they change their ways. It is a very long time since we have had such a person in either Number 10 or Number 11, Downing Street. Unfortunately it is no longer possible for the holder of either office to sit in the House of Lords.
March 19, 2026
Do we actually need an OBR? There seem to be plenty of institutions who make economic forecasts, why not use them instead having determined over a period of time which tend to give the better (most accurate) forecasts for the next 2 years?
The ‘impossible task’ mentioned (too much detail over too long time horizon) reminded me of a very apt phrase from some good consultants (not one of the big firms) we had at work many years ago regarding longer term sales forecasts: “Better to be roughly right than precisely wrong”. Meaning don’t spend too much effort trying to forecast the longer term in detail, just get the macro picture roughly right with much less effort.
March 19, 2026
Off Topic
But the best response to a lame Parliament, a lame Government, a lame ill conceived law, with its lame unaccountable Quango’s to-date. They do hate freedoms of others while denying others theirs
https://order-order.com/2026/03/19/ofcom-fines-4chan-520000-lawyer-responds-with-picture-of-giant-hamster/
the comments are a must read. The UK Parliament has been embarrassed once more, the real flaw is that others think the rest of UK as is that lame
March 19, 2026
Rachel Reeves says of the EU referendum “I wish we had voted to Remain”.
Well if she doesn’t believe in a UK outside of the EU, she’s effectively admitted she’s unfit for her job.
Move along and make room for a Chancellor that does believe in the UK.
March 19, 2026
The self-indulgent harm Trump and his few buy noisy pals here in the UK has done to the Conservative / right-wing cause here is big. He is turning more and more people to the left. It could end with Labour remaining in power than longer than we hoped. Trump is doing a great job at turning himself into a kind of Sheriff of Nottingham figure and Starmer as Robin Hood (even though Starmer has more socialist thief about him regarding taxing people to the hilt than any romantic Robin Hood figure).
March 19, 2026
Today’s News – ‘UK borrowing costs rise three times faster than rest of Europe’
Of course the OBR spot on with their predictions as usual factored these rises in. World events change things, they are not out of the norm or unexpected they are just different and they keep occurring. Paying someone who is unaccountable, without responsibility to be clairvoyant £4.5million a year, is a Parliament in neglect of its job they could stop this waste today, they refuse. So who is it that is really in the wrong?
March 19, 2026
” I know it is staffed with civil servants, and they work very closely with the Treasury…”
Exactly, and that is why the OBR can never be independent – it it a concept they could never understand.
The best thing to do with the OBR is to dig a hole, bury it, and sing a Requiem over it.
March 19, 2026
The Treasury has over 2000 employees.At the very least 400 will be upper and senior ranking executives.
The OBR has 52 employees(entirely CS background)The Budget Responsibility Committee is joined at the hip
and has been without a Chairperson since 12/25.A member of the committee is a member of the Commission
of the Central Bank of Ireland(sorry to highlight the Republic of Ireland is a foreign country).The whole
set-up reeks of camouflage to avoid effective analysis of forecast and performance realities.
March 19, 2026
262 ‘illegal immigrants’ invaded the UK 18th March 2026 …the OBR can’t stop the boats
March 22, 2026
Even worse is that high volatility and high peaks in oil and gas pricies spurs on the madness of Green Energy which would simply ensure energy prices rise to a peak and stay there, and UK becomes increasingly a puppet of China.
We should insist Miliband wears a coarse jute sack every time he appears in Parliament or public.
March 22, 2026
PS And his salary is reduced annually by the percentage rise in energy prices.