Alan Budd, the economist appointed to head up George Osborne’s new Office for Budget Responsibility (OBR), is stepping down after just two months in post. This wasn’t supposed to happen, whatever the Tories are now saying.

The plan was simple. Osborne and Cameron want to drive through public spending cuts on a cataclysmic scale. They want to be able to claim that they have no choice but to do so.

But millions of people facing possible redundancy or seeing their public services disappear would take some convincing. And plenty of experts have warned that cutting public spending would simply drive the economy into a deeper recession.

So Osborne established the OBR as an “independent” guarantor for Tory spending plans. The OBR would “independently” produce forecasts predicting how the economy would grow over the next four years.

At its head, he appointed Alan Budd, formerly of the Monetary Policy Committee and latterly a director of City gambling firm IG Index. Alongside Budd was Gordon Dicks, former UK chief economist at RBS.

Lo and behold, the forecasts of these City sages “independently” confirmed that Tory plans for spending cuts were nothing to be feared. They “independently” forecast that the unemployment produced by cuts in public spending would be overwhelmed by a phenomenal recovery in the private sector.

As the public sector retreated, private investment would step into its place. Two million new private sector jobs would be created.

Tory fantasies

This is a hopeless Tory fantasy. Private investment will not expand in a depressed economy with weak exports and falling public spending. The OBR’s forecasts lack credibility.

When its rosy predictions were “independently” made available in time for Prime Ministers’ Questions last week, helping David Cameron out in an awkward debate, the whole sham was exposed.

The OBR is based in an office at the Treasury. It is staffed by Treasury secondees. It handles media enquiries through the Treasury press office.

It’s about as “independent” as Gordon the Gopher: lots of excitable squeaking, but it’s a Tory hand up the arse that does all the work. Everyone now knows this.

Making a fist of it

Events are not proceeding to plan. Driving through the cuts is already extracting a high toll from this weak coalition government.

The millionaire David Laws, who as Chief Secretary to the Treasury announced the first round of £6bn cuts, was out within a week – caught fiddling his expenses.

The OBR, supposedly offering independent support for Tory spending plans, is virtually still-born. A central plank of Osborne’s economic strategy looks bust.

Michael Gove can’t work out which schools are getting scrapped. One Tory MP is threatening rebellion.

All this is taking place with barely a glimmer of wider opposition to the plans. That should be reason enough to take heart.

Weak, but nasty

But a weak government can still be a vicious government. The coalition remains committed to swinging the axe.

They believe in the cuts – they think free markets are better than public spending.

They want to cut social costs to boost private profits – so Corporation Tax is reduced while benefits are chopped.

And, as the Bank of International Settlements has warned, there is the creeping apprehension that a fresh banking crisis could soon be upon us. Clearing out public spending now will make another bailout easier in the future.

Politics is the key

We can’t rely on the government collapsing under its own weight. Stopping the cuts means building an opposition.

It means, in particular, winning back the argument over the need for these cuts. They have nothing to do with New Labour’s “profligacy”.

The cuts are being brought in to pay for the last banking crisis, and to cope with the next. The government is making ordinary people suffer to keep the City of London in clover.

Individual anti-cuts campaigns are springing up across the country. But thousands of small campaigns won’t defeat the government. Doing that means building a national campaign that can win the political argument.

That means winning the argument against the cuts, and in favour of taxing the rich. It means winning the argument for nationalised banks to invest in new, green jobs, instead of funding fat bonuses. Only a united, political campaign can credibly address these questions.