The Rest Is Money 212. Has Reeves Been Unlucky Or Unwise?
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Oct 1, 2025 In this thought-provoking discussion, Paul Johnson, a former director of the Institute for Fiscal Studies, delves into the intricacies of fiscal forecasts and government policies. He argues that the proposed EU mobility scheme will have minimal financial impact and critiques calls to reduce OBR forecasts, highlighting their importance in realistic budgeting. Johnson warns of the potential £30bn budgetary gap from productivity downgrades and discusses the challenges posed by AI on apprenticeships. His insights shed light on the realities of public investment and housing targets in today's economic landscape.
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Mobility Scheme Won't Move The Budget
- A proposed EU-UK youth mobility scheme would deliver only trivial fiscal gains even on optimistic assumptions.
- Paul Johnson estimates realistic revenue impacts are in the low hundreds of millions, not billions.
Keep Forecasts, Limit Fiscal Events
- Eliminating one of two annual fiscal events is reasonable but scrapping twice-yearly forecasts is harmful.
- Paul Johnson warns fewer forecasts increase speculation and produce bigger shocks between updates.
Forecasts Are Judgment Calls
- Forecasts always involve judgment and will change as new information arrives.
- Johnson notes political consequences shape forecasters' choices and can bias timing or magnitude of revisions.