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| Brexiteers will trash anyone who gets in their way Brexiteers will trash anyone who gets in their way | |
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| The Office for Budget Responsibility shines like a good deed in a naughty world. It was created as an independent statutory body in 2010 to promote more trustworthy government. It was an excellent idea, was widely welcomed and has worked well. It has survived six and a half years. Now, though, it has been kneecapped in a back alley by Brexit provos and its brand has been trashed in the anti-European press’s embrace of post-truth politics. | The Office for Budget Responsibility shines like a good deed in a naughty world. It was created as an independent statutory body in 2010 to promote more trustworthy government. It was an excellent idea, was widely welcomed and has worked well. It has survived six and a half years. Now, though, it has been kneecapped in a back alley by Brexit provos and its brand has been trashed in the anti-European press’s embrace of post-truth politics. |
| It may survive the encounter. Let us hope that it does. But this week’s hit-and-run attack means the age of OBR innocence is over. Its cautious forecasts about the impact of Brexit on the British economy had barely been reported by Chancellor Philip Hammond on Wednesday before Brexiteers decided the OBR had to be done over for displaying insufficient optimism in the cause. | It may survive the encounter. Let us hope that it does. But this week’s hit-and-run attack means the age of OBR innocence is over. Its cautious forecasts about the impact of Brexit on the British economy had barely been reported by Chancellor Philip Hammond on Wednesday before Brexiteers decided the OBR had to be done over for displaying insufficient optimism in the cause. |
| “Ridiculous and wrong,” said one anonymous cabinet minister of the OBR’s extremely sober estimate that Brexit may cost Britain £59bn over the coming five years. “Not worth the paper it is written on,” said another, or possibly the same minister. “Another gloom and doom scenario” complained the former Tory leader Iain Duncan Smith. “Lunatic,” said Jacob Rees-Mogg. | “Ridiculous and wrong,” said one anonymous cabinet minister of the OBR’s extremely sober estimate that Brexit may cost Britain £59bn over the coming five years. “Not worth the paper it is written on,” said another, or possibly the same minister. “Another gloom and doom scenario” complained the former Tory leader Iain Duncan Smith. “Lunatic,” said Jacob Rees-Mogg. |
| The Daily Mail, which led the cheerleading when George Osborne set up the OBR and abolished what he called Gordon Brown’s “fictional” forecasts, takes a diametrically opposite view now. This week the Mail took the lead in working the OBR over. You couldn’t believe anything coming from a body with such an appalling record as the OBR, run by “its Europhile chairman Robert Chote”, the Mail opined on Thursday. | The Daily Mail, which led the cheerleading when George Osborne set up the OBR and abolished what he called Gordon Brown’s “fictional” forecasts, takes a diametrically opposite view now. This week the Mail took the lead in working the OBR over. You couldn’t believe anything coming from a body with such an appalling record as the OBR, run by “its Europhile chairman Robert Chote”, the Mail opined on Thursday. |
| But what is the crime for which the OBR stands accused? Simply that it stated, on the basis of the facts at its disposal, that there are many uncertainties about the impact of Brexit on the economy. What rational person could disagree with that? Yet the OBR’s list of basic assumptions in its 260-page report on the economic and fiscal outlook this week are not exactly controversial: the UK to leave the EU in 2019; slower import and export growth in the transitional period; a tighter migration regime. | But what is the crime for which the OBR stands accused? Simply that it stated, on the basis of the facts at its disposal, that there are many uncertainties about the impact of Brexit on the economy. What rational person could disagree with that? Yet the OBR’s list of basic assumptions in its 260-page report on the economic and fiscal outlook this week are not exactly controversial: the UK to leave the EU in 2019; slower import and export growth in the transitional period; a tighter migration regime. |
| It’s true, the OBR has been very circumspect in its forecast. It does not, for example, predict any specifically Brexit-related job losses in the period up to 2021. That will strike many as a heroically sunny assumption, fully worthy of a medal from Liam Fox. But it is a good reminder that Chote and his colleagues have erred on the side of caution in their latest forecasts. Their message is that many things are possible, from a doubling of current growth rates to the disappearance of growth altogether amid a fresh recession. | It’s true, the OBR has been very circumspect in its forecast. It does not, for example, predict any specifically Brexit-related job losses in the period up to 2021. That will strike many as a heroically sunny assumption, fully worthy of a medal from Liam Fox. But it is a good reminder that Chote and his colleagues have erred on the side of caution in their latest forecasts. Their message is that many things are possible, from a doubling of current growth rates to the disappearance of growth altogether amid a fresh recession. |
| Looking at the way the OBR hedges every statement about Brexit in its report, some may suspect Chote has been nobbled to say too little. Certainly that’s the impression one gets when reading that the OBR, in accordance with its legal obligation to make its forecasts on the basis of current government policy, has been told as little as the rest of us about the May government’s negotiating position on Brexit. The real problem is that the forecast reflects the data: uncertainty in, uncertainty out. | Looking at the way the OBR hedges every statement about Brexit in its report, some may suspect Chote has been nobbled to say too little. Certainly that’s the impression one gets when reading that the OBR, in accordance with its legal obligation to make its forecasts on the basis of current government policy, has been told as little as the rest of us about the May government’s negotiating position on Brexit. The real problem is that the forecast reflects the data: uncertainty in, uncertainty out. |
| It’s important to remember this is inherent in the task of forecasting. No one can predict the future. That includes the OBR. As the late Denis Healey, Labour’s chancellor in the 1970s, once put it: “Like long-term weather forecasts, economic forecasts are better than nothing, but their origin lies in extrapolation from a partially known past through an unknown present to an unknowable future, according to theories about the causal relationships between certain economic variables which are hotly disputed by academic economists, and may in fact change from country to country or from decade to decade.” | It’s important to remember this is inherent in the task of forecasting. No one can predict the future. That includes the OBR. As the late Denis Healey, Labour’s chancellor in the 1970s, once put it: “Like long-term weather forecasts, economic forecasts are better than nothing, but their origin lies in extrapolation from a partially known past through an unknown present to an unknowable future, according to theories about the causal relationships between certain economic variables which are hotly disputed by academic economists, and may in fact change from country to country or from decade to decade.” |
| The most important words in what Healey wrote are “better than nothing”. Forecasts are inherently uncertain. They often, even routinely, prove to be wrong. But that does not make them useless or dishonest. If history, as Coleridge said, is a lantern on the stern of a ship ploughing forward across the sea through pitch darkness, the forecast is like a nautical chart in that same nocturnal voyage. It’s a guide to action and options based on recent previous experience, not a guarantee of a safe passage. | The most important words in what Healey wrote are “better than nothing”. Forecasts are inherently uncertain. They often, even routinely, prove to be wrong. But that does not make them useless or dishonest. If history, as Coleridge said, is a lantern on the stern of a ship ploughing forward across the sea through pitch darkness, the forecast is like a nautical chart in that same nocturnal voyage. It’s a guide to action and options based on recent previous experience, not a guarantee of a safe passage. |
| The problem to which the OBR was intended to be a solution was that until 2010 the forecasts were so often tweaked and spun for political reasons that they had lost all credibility. In the absence of an independent fiscal authority to reckon with, the Treasury simply redefined the problems that it was setting itself. Gordon Brown became notorious for this. Alistair Darling flirted with setting up an independent forecaster in 2008 because the financial crisis was making a nonsense of the government’s own forecasts. When Osborne set up the OBR two years later, Darling backed him. His then deputy, David Laws, wrote later that it was an uncontroversial reform. | The problem to which the OBR was intended to be a solution was that until 2010 the forecasts were so often tweaked and spun for political reasons that they had lost all credibility. In the absence of an independent fiscal authority to reckon with, the Treasury simply redefined the problems that it was setting itself. Gordon Brown became notorious for this. Alistair Darling flirted with setting up an independent forecaster in 2008 because the financial crisis was making a nonsense of the government’s own forecasts. When Osborne set up the OBR two years later, Darling backed him. His then deputy, David Laws, wrote later that it was an uncontroversial reform. |
| And so it was, six years ago. But it reckoned without the transformation of Brexit. Brexit was a decision taken for powerful emotional reasons. It was a revolt against what the Daily Mail now relentlessly dubs the elite, by which it really means elected politicians of every stripe, even though the Mail itself is infinitely more powerful than most institutions, not just media institutions, in this country. So the facts in the forecasts are no longer just the facts, as they were before the referendum, but the elite’s facts, politicians’ facts, facts that should not be believed. | And so it was, six years ago. But it reckoned without the transformation of Brexit. Brexit was a decision taken for powerful emotional reasons. It was a revolt against what the Daily Mail now relentlessly dubs the elite, by which it really means elected politicians of every stripe, even though the Mail itself is infinitely more powerful than most institutions, not just media institutions, in this country. So the facts in the forecasts are no longer just the facts, as they were before the referendum, but the elite’s facts, politicians’ facts, facts that should not be believed. |
| This is a deeply disturbing change, and this week has produced an episode that is emblematic of it. The trashing of the OBR’s credibility has happened now, rather than before, because Brexit has empowered it. If the facts seem to be at odds with Brexit, as the very carefully and conditionally expressed facts in the OBR report are, then in Brexiteer eyes the fault does not and could not possibly lie with Brexit, which is by definition beyond challenge, but with the facts – and in particular with those who report or believe the facts. | This is a deeply disturbing change, and this week has produced an episode that is emblematic of it. The trashing of the OBR’s credibility has happened now, rather than before, because Brexit has empowered it. If the facts seem to be at odds with Brexit, as the very carefully and conditionally expressed facts in the OBR report are, then in Brexiteer eyes the fault does not and could not possibly lie with Brexit, which is by definition beyond challenge, but with the facts – and in particular with those who report or believe the facts. |
| The Brexiteers are doing this because they can. The only fact they believe in is the result of the referendum. Nothing else matters to them. And, for now, they command the arena in which every political argument is conducted, even if they do not command the argument. The attempt to humble the OBR is intended as a reminder to Hammond and Theresa May that the Brexiteers are masters now, and will be so until they are stopped. | The Brexiteers are doing this because they can. The only fact they believe in is the result of the referendum. Nothing else matters to them. And, for now, they command the arena in which every political argument is conducted, even if they do not command the argument. The attempt to humble the OBR is intended as a reminder to Hammond and Theresa May that the Brexiteers are masters now, and will be so until they are stopped. |