Daily Archives: May 17, 2010

An important intervention from David Davis on the proposals for fixed term parliaments. He told the BBC it was a “very serious mistake” to require a 55 per cent super majority to call an early election.

“The consequence, in the extreme, is you could have a government in parliament which could command 45 per cent, or 45 per cent plus one, of parliamentary votes, but no more, and therefore couldn’t deliver a budget, couldn’t deliver its manifesto, couldn’t deliver its normal legislation and yet couldn’t be thrown out either.”

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Whatever the merits of the Office for Budget Responsibility, there is no doubt that setting it up is a bold move that carries plenty of risk.

1) Independent forecasts can prove rather inconvenient George Osborne once described the Treasury books as a “work of fiction”. But he should be careful what he wishes for. A one per cent cut in the growth forecast for next year adds around £7bn to the cuts required to tackle the deficit in the next spending round. That’s roughly equivalent to the entire defence equipment budget or a 6 per cent cut in public sector pay. If the OBR proves to be correct, that’s all for the better. (The OBR may also find the public finances are OK, in spite of the over-optimistic growth forecasts). But, if the OBR is regularly on the pessimistic side, Osborne will be faced with an even longer list of awful spending decisions. Read more