David Cameron has been rebuked for giving a misleading account of his government’s economic record, after he claimed the Office for Budget Responsibility (OBR) has said austerity measures were not to blame for the lack of growth.
Yesterday the prime minister delivered a pre-Budget speech in which he insisted the government would not abandon its current economic plan. He lay the blame for the country’s economic woes on global factors rather than the policies of the Treasury since 2010.
“As the independent Office for Budget Responsibility has made clear growth has been depressed by the financial crisis, the problems in the Eurozone and a 60 per cent rise in oil prices between August 2010 and April 2011,” he said.
“They are absolutely clear that the deficit reduction plan is not responsible. In fact, quite the opposite.”
However on Friday Robert Chote, the chairman of the OBR, has wrote to Cameron to complain this was misleading.
“For the avoidance of doubt, I think it is important to point out that every forecast published by the OBR since the June 2010 Budget has incorporated the widely held assumption that tax increases and spending cuts reduce economic growth in the short term, ” he said.
Chote said economic growth “has been much weaker since the end of 2010 than we and most other forecasters expected in June 2010” and that it was “clearly possible” that it was in part due to the government’s austerity measures.
The OBR was set up by George Osborne in 2010 to provide independent economic growth forecasts to avoid the Treasury being accused of fixing the figures as had happened in the past.
It is not the first time the prime minister has been accused of making misleading claims about the government’s economic record.
In January the UK Statistics Authority told him off for using a party political broadcast to claim that the government was “paying down Britain’s debts” as the country’s level of debt was actually rising.
A Downing Street spokesman said: “The OBR has today again highlighted external inflation shocks, the eurozone and financial sector difficulties as the reasons why their forecasts have come in lower than expected. That is precisely the point the prime minister was underlining.”
Shadow chancellor Ed Balls said Cameron had “an obligation to be straight with people and not play fast and loose with the facts”.
“This is another embarrassing rebuke for the Prime Minister, just 24 hours after his panicky and defensive speech on the economy. Deep spending cuts and tax rises have reduced economic growth, as the OBR says, and so it was deeply misleading for David Cameron to claim otherwise.”
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