George Osborne has announced that the Treasury will stop making economic forecasts, with the task passing to a new Office of Budget Responsibility. This will supposedly make it impossible for future governments to base their budget projections on phoney economic forecasts. Osborne described it as "a rod for my back".
I have at least three problems with this.
First, and I suppose least important, I'm pretty sure that the Tories came to office planning some kind of a "bonfire of the quangos", yet here's George setting up a new one.
Second, despite what Osborne appears to believe, the Treasury's forecasting record was consistently better than that of most private sector experts throughout the decade leading up to the credit crunch. It's simply not true to suggest that the Treasury connived with politicians to cook the books in order to facilitate irresponsible spending decisions. Nobody's forecasting record looks too clever over the past three years or so, but the Treasury's is still as good as anyone's.
Third, the Treasury bends over backwards to make it easy for even the laziest analysts to compare its forecasts with those of private sector experts. It collates a wide range of private sector forecasts in a monthly report on its website, alongside its own projections. I'm not aware of any comparable agency elsewhere in the world that does this so meticulously. Not, you'd think, the behaviour of someone surreptitiously fiddling the figures.
There's work to be done, George. Don't sweat the small stuff.
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