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The Office for Budget Responsibility (OBR) must be manifestly autonomous if it is to operate to the greatest advantage for UK fiscal forecasting, the Treasury Select Committee of MPs, who today published their recommendations for the future of the OBR.
The committee’s report makes recommendations about the requirements for an independent OBR ahead of primary legislation to establish the organisation in statute later this year.
As a minimum, the document advises that the legislation should include:
- the establishment of the OBR as an institution with its own legal personality, responsible for appointing its own staff;
- a requirement on the OBR to act transparently, objectively, and independently;
- a clear remit and set of core tasks;
- a requirement that the Treasury Select Committee should have a veto over appointment or dismissal of the chair of the permanent body and the members of the Budget Responsibility Committee;
- provision for a small group of non-executive directors to support, pro bono, the Budget Responsibility Committee;
- a requirement that Government officials support the OBR when it is preparing forecasts;
- a requirement that the OBR has a right of access to the information it needs;
- a review of the OBR’s performance, remit and institutional accountability arrangements within five years, including whether it should become a parliamentary body.
The committee’s chairperson, Andrew Tyrie, remarked: ‘In creating the OBR in a bid to bolster the credibility of UK fiscal forecasting, the Chancellor has taken a bold step, which is not without risks. The task now is to make this proposal work to best effect and to underpin it by statute.
‘For the OBR to succeed, it will have to be, and be seen to be, independent, particularly after the difficult early period of the interim body.’
He added: ‘It is vital that the OBR commands confidence across party boundaries. The Treasury committee will take evidence from the organisation regularly as part of the Budget process. We will intervene if we believe the OBR’s independence is threatened.
‘If it is to be successful, the OBR will provide clear, impartial forecasts and commentary, which improve public debate. It will avoid being drawn into political controversy, even though the material it provides will inevitably be used by others in political debate.’
