July 15 (Bloomberg) -- Former Prime Minister Gordon Brown “repeatedly and often angrily” rejected Chancellor of the Exchequer Alistair Darling’s proposed economic forecasts, telling him to bring back better ones, former Business Secretary Peter Mandelson said in his memoirs.
The account supports the claim of the Conservative government that Brown’s Labour administration changed forecasts to suit policy, something Darling has denied. George Osborne, who succeeded Darling as chancellor after Labour lost the election in May, set up an Office for Budget Responsibility to provide independent economic predictions.
As Darling prepared his April 2009 Budget, Brown told him “the whole Treasury forecast was wrong and insisted that orthodox methods couldn’t be applied to measuring the structural deficit,” Mandelson wrote in his memoirs, “The Third Man,” published today. Brown argued that taxes would pay down the deficit once growth returned.
“Alistair told Gordon he was being ludicrously optimistic, not only about growth prospects but about Britain’s ability to support such a large, and expanding, deficit,” Mandelson wrote. “Britain’s credit status might be downrated.”
In May 2009, a month after the Budget statement, Standard & Poor’s put the U.K.’s AAA rating on negative outlook.
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