Q uite a few eyebrows were raised by David Cameron's speech on Thursday when he appeared to set guidelines for the Budget which George Osborne is due to present in two weeks.
Prime ministers do not normally interfere with what is the Chancellor of the Exchequer's responsibility, and certainly not in public. Mr Cameron defended the government against criticism that it had failed to stimulate growth in the economy and that its deficit reduction policy with spending cuts and tax rises were to blame. He supported his case by quoting the Independent Office for Budget Responsibility (OBR) as saying that the deficit reduction plan is not to blame.
Cue Robert Chote, head of the OBR, who yesterday published a letter he had written to the prime minister -- for the avoidance of doubt -- pointing out that the Office had consistently said spending cuts and tax increases have reduced economic growth in the short term. And, for good measure, Mr Chote put a figure on it -- 1.4 per cent of GDP over the past two years.
Mr Chote's public intervention is unprecedented and potentially embarrassing for the government. Mr Osborne set up the OBR in 2010 to undertake independent and authoritative analysis of the UK's public finances. And also, it seems, to correct the prime minister when he incorrectly represents the OBR's view of the reasons for the lack of growth in Britain's economy.
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