OBR ‘revised unemployment downwards just before Budget’
By politics.co.uk staff
The newly-formed Office for Budget Responsibility (OBR) is facing serious questions about its independence after it emerged it downgraded its unemployment forecasts just before the Budget.
The office, which was formed by chancellor George Osborne to free forecasts from any sense of political interference, reduced the total by 175,000 after making methodological assumptions about pensions and pay.
“The OBR themselves made some methodological changes between the Pre-Budget report and the Budget,” a Treasury spokesman said.
“The Treasury did not put any pressure on the OBR to make the employment forecasts more favourable to the government.”
The news could prove difficult for departing head Sir Alan Budd, who must face the Treasury committee on Tuesday.
“There were already serious questions about the independence of the Office of Budget Responsibility,” said shadow chancellor Alistair Darling.
“Now its very credibility is at stake. It’s clear from the revised figures that the public sector job losses will be 175,000 greater than the prime minister claimed last week.
“Right from the start the Tories used the OBR not just as part of the government but as part of the Conservative party. They have succeeded in strangling what could have been a good idea at its birth.”
The forecasts found that nearly 500,000 public sector job losses would take place in 2014/15, rising to 600,000 by 2015/16.
But the previous forecasts would have calculated just under 800,000 job losses by 2015/16.
