The coalition Budget’s toll on jobs – part 3

What assumptions are inside?

Curiouser and curiouser. The Financial Times has been digging into why the coalition’s heavier public spending cuts will not, according to the Office for Budget Responsibility, result in proportionately heavier public sector job losses.

The FT’s economics editor Chris Giles has managed to establish that the OBR not only worked on the assumption that Labour would not have imposed pay restraint (an assumption I questioned) but also the assumption that there will be restraint on public sector pensions and promotions.

The Government has announced the policy of pay restraint, but has no explicit policy on pensions and promotions. A case can be made for the OBR altering forecasts on policies announced. But altering them on policies that have not yet been made public? That’s fishy.

And why did the OBR not declare all its assumptions when it released its projections on the impact of the budget on public sector jobs? Why was it left for excellent journalists like Giles to work it out?

So much for transparency. And so much, many will conclude, for the OBR’s independence.

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