The OBR vs reality

27th February, 2013 10:46 am

The Office for Budget Responsibility (OBR) was set up by George Osborne to provide estimates of economic performance without the interference of the Treasury. Today as the final figures for 2012 are released by the Office for National Statistics, we can compare how the OBR estimates compare with what Osborne has delivered in reality.

Lets take growth in 2012 for example. Growth is estimated to have been 0.3% across 2012 – yet in 2010 the OBR predicted a whopping 2.8% growth:

obrvsreality1

And how about business investment in 2012? The OBR originally estimated that would be 10% – yet it’s actually just 0.4%:

obrvsreality2

Of course circumstances change and economic forecasts are often wrong – but the problem is that these forecasts are what the government’s entire economic strategy was based on. And when it proved to be wrong – Osborne carried on with Plan A anyway…

(h/t: Duncan Weldon for the stats)

  • postageincluded

    What’s more, the errors that the OBR makes seem always to be errors that flatter the government.

    Chote came to the OBR from the Institute for Fiscal Studies, which despite its claims to independence, consistently recommends tax changes that benefit the rich at the expense of the poor. Its pretty clear that his economic theory is one designed to promote Tory policy rather than provide independent advice. As always the Tories have surrounded themselves with yes-men who will tell them what they want to hear. The only surprise is how quickly they did it.

  • Monkey_Bach

    Never in the field of economic forecasting has so much been miscalculated about so many things by so few…

  • BenM_Kent

    “And when it proved to be wrong – Osborne carried on with Plan A anyway…”

    You didn’t think Osborne’s strategy had anything to do with reducing the deficit did you? Naive!

    Even today Tories around the web are belching out their small state mantras as if the disasters in the past 6 years brought on by their economics hadn’t happened.

    It’s the ideology, stupid.

  • Dave Postles

    Irresponsible budgies, the lot of them. The canaries in the Treasury provide the data and the budgies just accept the data.

  • TomFairfax

    Don’t forget the first head of the ‘independent’ OBR left after they issued forecasts that didn’t aid the government’s case, but were a damn site closer to reality. Hardly surprising that ever since the OBR is nothing more than the propaganda wing of the Treasury. For instance scorn was poured on the OBR predictions for the 4G auction when they made them last year by industry watchers, but somehow the government chose the OBR figures rather than the accurate figures being discussed by those who knew the telecoms industry. Labour should propose to scrap the OBR unless they stop the charade and actually start publishing information that isn’t disproved almost immediately, and actually warrants the cost of the organisation. I’m sure I and most LL commentators could forecast to the same level of inaccuracy at a fraction of the cost, even though it’s a challenge to be that wrong so consistently.

Latest

  • Comment Call on all Labour candidates to take local health and wellbeing boards to task over cold homes

    Call on all Labour candidates to take local health and wellbeing boards to task over cold homes

    For years fuel poverty campaigners have been calling on politicians to recognise the affects of cold and damp homes on the health of our most vulnerable households. As early as 2011, a report from the World Health Organisation proved that on average nearly 8,000 people die in the UK every year due to living in cold homes – three to four times the number of people who die on British roads and far worse than really cold countries like Germany […]

    Read more →
  • News Is Gareth Thomas planning on running to be London Mayor?

    Is Gareth Thomas planning on running to be London Mayor?

    The next London mayoral contest is only a little over a year away. Although between now and then there’s the general election to think about, it’s been quite clear for a while now who will throw their name into the hat to be Labour’s candidate (and some already have): Tessa Jowell, Diane Abbott, David Lammy, Christian Wolmar and Sadiq Khan. But it looks like there could be another name to add to that list. BuzzFeed have reported that Gareth Thomas, MP […]

    Read more →
  • News Another Tory MP’s campaign goes out in the wrong seat

    Another Tory MP’s campaign goes out in the wrong seat

    Last month we reported how Tory MP David Burrowes had gone out doorknocking in the wrong constituency – and ended up at a Labour MP’s house. Now it’s been discovered that another Tory MP has a little trouble working out who he is supposed to be representing. Voters in Hammersmith recently contacted their MP, Labour’s Andy Slaughter, when they received campaign leaflets from Chelsea & Fulham MP Greg Hands. Slaughter promptly sent a letter to Hands, asking him to investigate the […]

    Read more →
  • News Here’s what happens when you search David Cameron’s name on Twitter today

    Here’s what happens when you search David Cameron’s name on Twitter today

    David Cameron’s desperate attempts to get out of debating Ed Miliband dominate today’s news, as his spin doctor Craig Oliver sends a petulant letter to broadcasters, telling them that the PM will only take part in one debate at the end of March – and only if the leaders of Labour, the Lib Dems, the Green Party, UKIP, the SNP, Plaid Cymru and maybe the DUP are all there too. Oliver’s huffy letter complains that the broadcasters have proved consistently willing […]

    Read more →
  • News Jim Murphy says Ashcroft poll “bad news for Scottish Labour but great news for the Tories”

    Jim Murphy says Ashcroft poll “bad news for Scottish Labour but great news for the Tories”

    As we covered last night, yesterday’s Ashcroft polling showed Labour doing extremely badly in Scotland.   Of the five Labour seats polled north of the border, Ashcroft showed the party losing all but one – Jim Murphy’s seat East Renfrewshire. And the Scottish leader is only ahead by one point. Ashcroft also found Labour losing Kirkcaldy – the seat from which Gordon Brown is stepping down in May – where Labour were 50 points ahead of the SNP in 2010. […]

    Read more →
Share with your friends










Submit