The PM keeps repeating the figure £16bn in relation to the OBR's latest forecasts - giving the impression that this would have left a big hole in the public finances. What he fails to acknowledge is that that this is LITERALLY ONLY ONE PART OF THE STORY.
Here's why...
Yes: the OBR downgraded the fiscal numbers by £16bn (actually £15.6bn) due to weaker productivity (red bar below).
But it also simultaneously UPGRADED them by a whopping £32bn (blue bars).
This chart from @TheIFS shows it pretty clearly👇
Banging on about the £16bn productivity - as the PM did repeatedly in his press conference today - without also mentioning the £14bn inflation UPGRADE and the £17bn of other UPGRADES seems... pretty misleading to me.
It's simply NOT the full picture...
The really full picture is as follows:
When you take all the OBR's forecast changes (there was a big reassessment in spending as well as the revenue figs in the chart above), the net negative impact was just short of £6bn.
On its own, that would NOT have broken the fiscal rules.
In short: the reason the Chancellor raised taxes in the Budget wasn't due to an OBR downgrade.
It was because of CHOICES. A choice to raise welfare spending. A choice to leave more headroom vs its fiscal rule.
To imply this was down to the OBR is misleading, plain and simple.
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