Osborne faces pressure over fiscal monitor
CHANCELLOR George Osborne will come under pressure to increase the independence of the Office for Budget Responsibility (OBR) when its head, Sir Alan Budd, is grilled by an influential body of MPs this week.
The Treasury Select Committee is expected to ask Budd, who is due to step down as chairman on 19 August, whether there are sufficient safeguards against government interference in the OBR’s work.
Budd will suggest parliament plays a greater role in deciding senior appointments at the fiscal monitor. He will also say the OBR should be moved into a separate building to the Treasury, and should use more of its own staff rather than employees borrowed from Osborne’s department.
The call for a shake-up comes just months after the coalition government said it would set up an independent body to stop politicians “fiddling” economic forecasts and assessments of Britain’s public finances.
But the OBR’s early days were marred by controversy over tweaks to its unemployment predictions in the run-up to Osborne’s Budget.
Tomorrow’s committee hearing will focus on the OBR’s involvement with the Budget.
Although it will touch on the agency’s relationship with the government, a fuller committee hearing examining the OBR as an organisation is scheduled for the end of the month.
A source close to the OBR said Budd had been reflecting on possible improvements to the monitor since his appointment in June.
As well as verbally setting out his thoughts at the two Treasury Select Committee encounters, Budd is expected to write a detailed letter to the chancellor outlining his views on how a permanent incarnation of the OBR should work.
Budd’s decision not to stay on at the OBR beyond the end of this month – when his contract is due to expire – surprised observers and led to suggestions of a row with Osborne. A colleague said the claim was “nonsense” and insisted the chairman had “a perfectly constructive working relationship with the Treasury and the chancellor”.