Osborne slurs Treasury’s integrity

George Osborne uses an interview in today's Financial Times to continue his attack on the Treasury's fiscal forecasts. The estimates are made by civil servants.

George Osborne uses an interview in today’s Financial Times to continue his attack on the Treasury’s growth and fiscal forecasts. As outlined by Left Foot Forward before the election, the estimates are made by civil servant, based on cautious assumptions, and in line with Bank of England forecasts.

In an interview in today’s Financial Times, the new Chancellor says:

“But the decision on the growth forecast and the fiscal forecast in previous Budgets was a decision for the chancellor of the exchequer and not for Treasury officials and so I think you need to ask the previous chancellor and the prime minister about the growth forecasts in the March Budget.”

At his press conference this morning, George Osborne said:

“Frankly what previous Chancellors have done is move [the fiscal and growth forecasts] around a bit to try and fit their Budget measures”.

Prior to the election, Mr Osborne made a similar remark when he told the Financial Times, “The [Budget] Red Book is largely a work of fiction”. At the time, a Treasury spokesman directed Left Foot Forward this morning to Boxes C1 and C2 of the Budget. The former is a list assumptions audited by the National Audit Office. The latter outlines how “caution” is worked into the fiscal forecast. In making its predictions about the deficit, the Treasury assumes that growth will come in lower than expected; that the gap between VAT receipts and the theoretical tax liability will rise; and that the unemployment claimant count will stay at 1.74 million and not fall back to 1 million by 2014 as projected.

A similar attack was attempted and dispatched at the time of the March Budget when David Cameron claimed the growth forecasts were “rubbish” and were not the same as the Bank of England forecasts. Giles Wilkes of the Freethinking Economist blog wrote:

“This is a terrible exageration. Go to the Bank’s projections from Feb.   You will see all sorts of ranges.  Cameron has picked the very lowest one – that which depends on market expectations of rates rising, and using the mean, not the median … We have a great deal of economic slack to absorb – which we can absorb, so long as we invest.”

A Labour party spokesman told Left Foot Forward:

“We have always been entirely clear about public spending decisions. We’re required in law to set out forecasts that take account of all decisions taken and we’ve published these in Budgets and Pre-Budgets. The suggestion that Treasury civil servants have colluded in publishing anything other than accurate figures is just plain wrong. Every new Government tries blaming the last one. This just shows the old politics is alive and well with the Lib-Con coalition.”

It is unclear whether “previous Chancellors” includes his colleague Ken Clarke.

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22 Responses to “Osborne slurs Treasury’s integrity”

  1. House Of Twits

    RT @leftfootfwd Osborne slurs Treasury's integrity http://bit.ly/bBPBZe

  2. Andy Sutherland

    RT @leftfootfwd: Osborne slurs Treasury's integrity http://bit.ly/bBPBZe

  3. Grumpy Old Man

    “Osborne slurs Treasury’s integrity”. This sounds like a rerun of the “Hewitt Defence”. When Ms Hewitt was under pressure for her mismanagement of the NHS,she was being interviewed on “Today”. When it was put to her that she was less than successful as minister, she came out with the immortal line, “How dare you smear the dedicated and hard-working doctore and nurses” or words to that effect. The dedicated and hard-working Treasury civil servants will have done what their political masters wanted of them, Indeed, the late unlamented PM was known for eliminating any dissident voice in “his” Treasury. It is clear from Mr. Osbourne’s statement who he is after, and it is not the Permanent Secretary.

  4. Fat Bloke on Tour


    This is only the start and it needs to be adressed now.
    The Tories are trying to get their retaliation in first so that they can set the tone and the agenda. They are working on the basis that as they are new and fresh, people will listen to what they have to say and that the Labour leadership election will mean that the opposition will not be fully focused on day to day politics.

    Consequently the navel gazing needs to stop and the fightback needs to start.

    Less than 7 days in and they are tying to blame their cuts on Labour waste. Add in a little mood music about forecasts and they will justify their “Fire up the chainsaw, lets slash and burn” attitude on the state of the public finances and the way they choose to describe them.

    They are dog boilers, they want to do this to lower their tax rates in the future, but they will explain it as something they had to do now for the sake of the deficit. Shroud waving at its best.

    Consequently, we / you / I need to fight over every issue.
    The threads hang low in ever greater numbers.

    55% Dissolution threshold — Naked politicing
    Spelman, Cormack … — Beyond belief, kitchen table deals for Agri-Business.
    Waste — Scraping the barrel more like.
    Sniffy does Economics — He just gets worse and worse.
    Sniffy does Forecasting — Slandering civil servants, is that allowed if you went to the right school?
    £6bill savings — Is the figure net or gross, does it relate top 2010/2011 or is it an annual figure? What will the money be used for, deficit reduction of political sweeties?

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