Office for Budget Responsibility

Oral Answers to Questions — Treasury – in the House of Commons at 2:30 pm on 12 October 2010.

Alert me about debates like this

Photo of George Osborne George Osborne The Chancellor of the Exchequer

The independence of the Office for Budget Responsibility is central to its credibility. With the approval of the Treasury Committee, I have appointed Mr Robert Chote to be its new chair. Today I am also appointing the distinguished economist Stephen Nickell and the experienced forecaster Graham Parker to serve alongside Mr Chote as permanent members of the budget responsibility committee. I am also publishing new terms of reference that safeguard the independence of the OBR, and copies are available in the Vote Office. I have asked the OBR to publish its autumn forecasts on the economy and the public finances on Monday 29 November.

Photo of Henry Smith Henry Smith Conservative, Crawley

I thank my right hon. Friend for his answer. I warmly welcome the creation of the OBR, at last, as an independent economic forecaster. I know that the Treasury Committee has raised a number of concerns, including the location of the OBR and whether the veto over the chairmanship of the Select Committee will be in the Bill.

Photo of George Osborne George Osborne The Chancellor of the Exchequer

The short answer to my hon. Friend's questions is yes. The OBR will move out of the Treasury-in the period immediately after the general election, that was the quickest way to establish it-to a permanent home. The choice of location will be for the permanent chair of the OBR who, I believe, will make a statement on that later today. I think the veto given to the Treasury Committee is the first of its kind in this Parliament, and will be enshrined in legislation.

Photo of Stephen Timms Stephen Timms Shadow Minister (Work and Pensions)

The Chancellor has announced two new appointments to the budget responsibility committee today. In line with the Treasury Committee's recommendation, will he extend its veto to those two appointments, as well as to the position of the chair? Will he invite the OBR to comment, as the Select Committee envisages, on the fiscal mandate?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

My answer to the right hon. Gentleman is yes and no-yes to the first part of the question. I listened very carefully to what the Treasury Committee said about the two other members of the budget responsibility committee, and I propose that it should indeed have a veto over those two appointments, which were made on the recommendation of a panel that included Robert Chote. I made the suggested appointments, but it will be for the Treasury Committee presumably to hold hearings and hopefully give its approval.

I do not propose to follow the second path that the right hon. Gentleman suggested. If the OBR begins commenting on the fiscal mandate, it intrudes on what is a legitimate matter of debate in the House between elected representatives who have strong views on this. I want to do everything I can to preserve the independence of the OBR, not just for this Government but for future Governments as well.

Photo of Andrew Tyrie Andrew Tyrie Chair, Treasury Sub-Committee, Chair, Treasury Committee, Chair, Treasury Committee

Would the Chancellor just confirm that the veto on the other two members of the OBR will function in exactly the same way as it would for the chairman? Would he also confirm that, in line with our recommendations, the OBR will be permitted at the request of Opposition parties at election time to examine their fiscal policies as well?

Photo of George Osborne George Osborne The Chancellor of the Exchequer

What I would say to my hon. Friend in response to his first point is yes, the procedure that I propose is exactly the same, unless he wants to volunteer some alternative method. On his second point, this is genuinely a matter that should be debated in the House in a non-partisan way, because it does not affect just this Parliament. There is a question of whether we want the OBR to be able to cost Opposition policies at the time of a general election. I propose to have discussions with Opposition party leaders about whether that is the appropriate thing to do, and it would be a legitimate matter for the House to debate and decide.