‘I make mistakes all the time’ said the beleagued Sir Alan Budd, the boss of the OBR, addressing the Treasury Committee of the House of Commons on Tuesday, 13 July. What did he mean? What mistakes? Sir Alan was defending the independance of the OBR against accusations that the it did not address adequately the effects on unemployment of the Government’s emergency budget, the release of figures to the Treasury in advance of general publication and his assessment of economic risk. But Sir Alan knows from his rich experience as a public servant that to make decisions is a risky business and no man can be expected to get all of them right. I am sure he was also reminding his audience that economic forecasting is an art and not a science – forecasts will, predictably, be wrong, overtaken by events and not corrected by arithmetic. Still we must do the best we can especially at times of the greatest uncertainty.
There is a widespread confusion of thinking about the nature of risk. It is flip and popular to assume that decision making in Government and the private commercial sector are similar and that the application of so-called lessons from one are directly applicable to the other. In the private sector decisions can be unwound , reversed quickly, without investors and the wider public even knowing the mistake was made. If reversed within an annual reporting period one need never know. Reversing a public policy decision may involve a complicated legislative procedure under the eagle eyes of a knowing nation – quite a different matter. What every top executive knows is that if he gets 50% of his decisions right he is doing exceptionally well and if they start to go wrong he can modify them expeditiously so that no one notices. He can build this flexibility into the original decision. This option is not open to the civil service.
I have commentated on the febrile hyper activity of the Coalition. As the Lib Dems have been reminded by the venerable Clegg it is necessary to prepare for a possible election in two years time. The Coalition parties have their checklists. This is what we promised in 2010 and look you electors we did all these things, tick, tick, tick. But, remind yourself, over 50% of these ‘things’ should never have been done in the first place and we lack the time to know which of these was a major blunder. In the nature of doing things some of the outcomes are long term. You think I exagerate? Here is an example. In the year 2018 (or some such date) the lights go out and power supply is denied to many parts of the country. National emergency! It is explained to an indignant public that we had been much too slow in developing nuclear energy which had been opposed by the Lib Dems in the mistaken hope of adequate alternative energy supplies. A possibility, you bet. Recorded crime has risen and the country has suffered avoidable terroist attacks. An affect of the Coalition programme of restoring civil liberties and abandoning CCTV, watering down anti-terrorist legislation and weakening the the DNA database? Or an effect of much higher unemployment and homelessness? Who knows?
Do we need a Coalition Government busy doing everything two political parties promised whether foolish or otherwise and are unable to rectify for fear of the electorate in two years time? Like a hole in the head, we do.