Opinion by Mathew Carr
Nov. 28-30: The Office for Budget Responsibility (OBR) was created in a rush by George Osborne, the Conservative Chancellor, shortly after the 2010 general election.
I contend now that the rush was because Osborne and the Tories were in thrall of the financial sector….even though that sector had just cost UK taxpayers £1.2 trillion (see notes).
Instead of acting in the interests of the taxpayers, the OBR has misled taxpayers about the future and has limited Parliament’s ability to govern in the interests of taxpayers.
It is a tool of the elite and of billionaires. It should be killed and I’m not the first to say this.
The Conservative Party under David Cameron and George Osborne first proposed an independent fiscal watchdog while in opposition (2008–2009).
After the 2010 election, austerity-obsessed George Osborne formally established the OBR as one of his first moves as Chancellor.
The intellectual push came from Osborne and his advisers, influenced by existing institutions like the US Congressional Budget Office and euro-area fiscal councils.
Liz Truss, the shortest-lived PM in British history and from Osborne’s own party, had big criticisms of the OBR that centred on one idea:
She believed the OBR constrained economic growth because its forecasts were too pessimistic and its influence too strong over government policy.
Her core criticisms (from speeches, interviews, and the fallout of the 2022 mini-budget):
1. OBR forecasts “talked down” growth
Truss argued that the OBR had a bias toward low growth assumptions, and that this discouraged more radical supply-side reforms such as tax cuts and deregulation.
2. The OBR had too much power over democratic government
She and Kwasi Kwarteng said the UK had become “over-reliant” on one unelected body whose forecasts could effectively veto government policy.
They were partly right. Partly wrong.
While the OBR may have been “institutionally sceptical” of her economic approach as she argued, instead of pushing for reregulation in the interests of the people she only cared for unfettered capitalism.
She seemed to worry only about making free markets more free when she should have been limiting mergers and ensuring competitive tension in markets in the interests of mums and dads.
Every PM since 2010 has been like her, somewhat. Against the people.
Now the Labour govt is seeking erode juries, another power move against the people, from a former prosecutor Starmer, who wants to lord over folks and stay in power instead of serving them.
The OBR forced governments into what she called “Treasury orthodoxy”
Truss often used the phrase “economic orthodoxy” or “Treasury orthodoxy”, arguing that the OBR was part of a system that favoured:
balanced budgets over growth, caution over bold reforms.
In her post-premiership interviews (2023–2024):
Truss was even clearer:
She said the OBR was “part of the problem” holding Britain back. Claimed it had “undermined” her mini-budget by releasing negative commentary. Accused it of modelling that was “flawed” and “self-fulfilling.”
The press, obsessed with the OBR numbers, are a big part of the problem. They are the protectors of flawed market systems.
Truss’s biggest single criticism:
➡️ The OBR limited the government’s ability to pursue pro-growth policies because its pessimistic forecasts and institutional authority constrained elected ministers.
With AI and climate change hurtling towards us, the OBR assumed economic markets and political systems are too fixed.
They are not.
The UK’s administrations have scaled back climate action at the wrong times and it has no clear plan for AI (more on this later).
The OBR is simply getting in the way, as its “mistake” earlier this week showed. It sort of published the budget BEFORE it was announced in Parliament.
(Updated with a little more on AI, details throughout)
Notes, ChapGPT ….unchecked:
Who came up with the idea?
The Conservative Party under David Cameron and George Osborne first proposed an independent fiscal watchdog while in opposition (2008–2009). After the 2010 election, George Osborne formally established the OBR as one of his first moves as Chancellor. The intellectual push came from Osborne and his advisers, influenced by existing institutions like the US Congressional Budget Office and euro-area fiscal councils.
Why did they do it?
To:
Provide independent forecasts for the UK economy and public finances. Prevent accusations that the Treasury was manipulating forecasts for political advantage. Create a “new fiscal watchdog” to boost credibility of government budgets.
Timeline
2009: Conservatives announce plan for an independent fiscal office. May 2010: Osborne creates the OBR on an interim basis. 2011: OBR becomes permanent through the Budget Responsibility and National Audit Act 2011.
Short answer:
Labour did eventually support the OBR, but not at first.
Detailed explanation
Before the 2010 election (when Labour was in government):
Labour did not propose an OBR themselves. They used internal Treasury forecasts and argued these were credible. When the Conservatives announced their plan for an independent fiscal watchdog in 2009, Labour ministers (like Alistair Darling) were skeptical, saying it wasn’t necessary and that the Treasury already had transparent forecasting.
After the 2010 election (Conservative–Lib Dem government creates the OBR):
Labour in opposition criticised the way Osborne set it up, especially: The speed of its creation. Lack of full statutory footing initially. Concern that early appointments looked political. But Labour said they supported the principle of an independent body producing forecasts.
Once the OBR was put on a statutory basis (Budget Responsibility and National Audit Act 2011):
Labour voted for the legislation. Ed Balls and other frontbenchers stated that Labour supported independent fiscal forecasting and would keep the OBR.
Summary
Initial reaction: Skeptical of Osborne’s version. Position after 2011: Supportive, and Labour has maintained cross-party backing for the OBR ever since.
UK massively supported banks before starting the OBR, which help protect a system that gives banks too much leeway
