James Moore: Treasury ministers will be fans of OBR's forecasts

Outlook Leave it to the Office for Budgetary Responsibility (OBR) to throw a black cloud over the end of a soggy week.

It says the Government will need to find £17bn in tax rises or spending cuts by the 2017/2018 financial year if public debt is to return to pre-financial crisis levels by, erm, 2061.

The OBR concedes that the Coalition's reforms to public-sector pensions cut the UK's liabilities by £175bn between 2010 and 2011.

But we're all still getting older so it's not nearly enough.

The Coalition loves this sort of thing: see, we told you so. The weakness in their thinking, however, has been made rather clear by recent economic data.

By aiming a battleaxe at the head of an economy still on monetary life support from the Bank of England, they are arguably exacerbating the country's fiscal problems rather than making them better; short-term pain for long-term agony.

The cuts aren't even being handled sensibly: ministers are willing to stare down public-sector workers and yet appear to have no compunction about kicking £15bn across the Atlantic for a Trident replacement we don't need and can't ever use.

As for the OBR's forecasts, Georgie, Danno and their chums in the Treasury will point to them as justification for sticking mulishly to their plan A regardless of whether it is economically literate to do so, and regardless of whether they should be taken with anything other than a big pinch of salt. They do, after all, stretch out nearly 50 years into the future.

A forecaster from 50 years ago assessing the fiscal position today would have been using a typewriter and an abacus before sensibly realising that his job was pointless and returning home to watch his black and white telly while the kids listened to the latest single from The Beatles.

Comments