"and free Britain to thrive

These institutions hem in government decision making and impede economic growth"

Telegraph: 14th March 2024: David Davis points out key flaws in the way our economic futures are decided. 

"As I listened to the Chancellor present the Budget last week, I thought that he did a very elegant job of coping with a very difficult global backdrop... But he was clearly boxed in by a seriously dysfunctional policy architecture...

It is perfectly understandable that Jeremy Hunt is cautious of unnerving the markets... The trouble is that the OBR’s forecasts are alarmingly inaccurate... A report on the OBR by the Conservative Way Forward campaign group has recently suggested that, since 2010, the combined total of the OBR’s errors in growth forecasts aggregates to a figure of over £500bn... 

In addition to the previous error margins, the simple fact is that these forecasts are incredibly sensitive to tiny changes in assumptions. You can pick a range of sensible assumptions which will nonetheless give massive discrepancies in outcomes...

Further exacerbating this issue is the fact that the OBR and Bank of England themselves work off different assumptions and forecasts. Not only have their forecasts been wrong, but they are wrong in distinct ways...

The origins of the Bank’s “independence” are, in fact, political, not economic. This “independence” was granted in 1997; done in large part to mitigate fears of an incoming Labour government acting financially irresponsibly...there is no indication that its decisions have been any better... compared with the period before Labour came into power. Margaret Thatcher and Nigel Lawson made better decisions than every government since the “independence” of the Bank was established... 

Nigel Lawson famously disbelieved all forecasts. Today there is a strong argument that the institutional structure of our decision-making is flawed, and it is time to finesse and, in some cases, abandon these rules. We should abolish the OBR, bring the Bank within the Government’s policy framework, and liberate the Chancellor to deliver the best policies he can for Britain."

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