Economy

And so it continues. The FT reports that Sir Alan Budd has denied that George Osborne cooked the OBR’s job loss forecasts. ‘It was genuinely a forecasting correction with no ministerial interference,’ he said, blandly. The correction was the result of the OBR’s use of a narrow definition of public sector workforce than is employed by other statisticians. That is not abnormal: statisticians are a law unto themselves. But, as the saying goes, it doesn’t look good. The OBR’s figures supported the government and the story is beginning to emit of a whiff of mendacity. Once more, George Osborne is in a mess of his own making. His political instincts veer from brilliance to catastrophe with an unpredictable regularity.

Forget the hubbub about Gove's schools list, the most damaging story for the government this week could well be on the cover of today's FT.  Alex Barker does a great job of summarising it here. But the central point is that the Office for Budget Responsibility changed its forecasting methods just before the Budget, with the effect of reducing how many public sector jobs would be lost due to the government's measures. This isn't damning on its own: statisticians constantly tweak their forecasting methods. But when you consider that the OBR's new methods incorporated policies which haven't even been announced yet (including one which pre-empts the findings of John Hutton's pensions commission), then it starts to look more dubious.

Well, that was quick: after only three months in the role, Alan Budd is to step down as the head of the Office for Budget Responsibility.  A shame, too.  In a quiet sort of way, he had become one of the defining figures in these early days of coalition government – helping to establish the OBR as one of the most significant actors on the political landscape.  It is certainly, now, a more effective body than I previously thought it would be. Although Budd's contract was for three months, there was some idle Westminster speculation that he'd stick around – so the rumour mill is puffing away at his departure today.

Much ado about the Guardian's scoop this evening: a leaked Treasury document which forecasts that up to 1.3 million jobs could be lost as a result of the spending cuts in the Budget.  Or, to put it in the words of the document itself: "100-120,000 public sector jobs and 120-140,000 private sector jobs assumed to be lost per annum for five years through cuts." You can expect Labour to get stuck into these numbers, and the fact that they were previously hidden from public view, with no uncertain relish.  Ed Balls has already described them as "chilling".  But it's worth making a couple of points, by way of context: i) There's job creation too. The Guardian goes onto report that "The Treasury is assuming that growth in the private sector will create 2.

Today’s Emergency Budget announced the most ambitious fiscal consolidation programme in decades.  It sets out a framework returning the government broadly to a state of fiscal solvency by 2014.  To do this, George Osborne announced a deficit reduction programme amounting to just over £100 billion in real terms – entirely in line with our recommendations.  The ratio of spending cuts to tax rises – 74:26 is largely in line with the international best practice model (which we also endorsed) of 80:20.

I’m quite optimistic about George Osborne’s budget – in the same sense that one might have been optimistic when Churchill took over from Chamberlain. Not because the situation is good, or because you think the road ahead will be easy or enjoyable, but because the road no longer leads to disaster. Not that Osborne is a Churchill – even though he will have his own fair share of blood, sweat toil and tears for us on Tuesday. I’m pretty confident he’ll head in the right direction, and at the right speed. I discuss this in my News of the World column today, but will say a little more here: 1. This Budget will probably mark the point when the UK started to recover. For two months now, the economic data has been favourable.

The Big Society is a great idea. But its problem has always been that it lacks definition; voters and even some Tory MPs aren’t quite sure what it means. But an idea being floated today gives you a sense of its practical and political potential. It is being suggested that the community right to buy, the idea that the community should have first refusal on any asset being sold off, should be applied to the port of Dover. The last government wanted to privatise the port but the new MP for Dover, a Tory called Charlie Elphicke has proposed that a community trust be allowed to buy the port and then lease it out to an operator.