We made a back of an envelope prediction last month about what we expected the outturn to be and plumped for £135bn on the basis of the arguments we have persistently been making about the dividend from the previous government’s stabilisation of the economy and the growth it enabled.

The OBR also had its chance in the March 2011 budget – with all those models and only eight days left of spending before the end of the financial year – to make their prediction. They went for £144bn. Well, we’ll have to split the difference. The outturn for 2011 was (again) lower, thanks (again) to Labour’s growth dividend.

So the previous Labour government’s strategy of growth-supportive deficit reduction reduced the deficit from a prediction in March 2010 £163bn to today’s outturn of £141bn; a reduction of £22bn.

The new government’s strategy of cutting growth to crowd in private sector investment has meant that the OBR has added a further £35bn that this government will borrow over the lifetime of this parliament. And given that the OBR record is to be wrong, about 10% or so out, this could be a lot higher.

It’s distasteful that the benefit cuts of £7bn were justified by the OBR’s prediction of a £149bn deficit. That June prediction was wrong by £7.9bn –  enough to pay for those benefit cuts. We wonder if they will sleep well tonight in the north Oxford beds.