MPs attack Office for Budget Responsibility for 'charging to the aid' of Osborne

 

The head of the Government’s independent fiscal watchdog was today forced to defend himself from “charging to the aid of the Chancellor” in tetchy exchanges with MPs.

Office for Budget Responsibility chairman Robert Chote, pictured, drew fire from members of the Treasury Select Committee over changes to the watchdog’s forecasting model revealed in last week’s Autumn Statement. Some experts claim this makes it easier for Chancellor George Osborne to balance the underlying budget deficit over the next five years.

The debate rests on the crucial judgment on the size of the so-called “output gap” — a hugely uncertain measure of the amount of slack in the economy. A smaller gap means that more of the UK’s deficit is “structural” and has to be tackled by Osborne with spending cuts or tax rises, rather than being whittled away naturally by economic recovery.

According to the OBR’s latest forecasts, it believes the output gap is currently 2.7% — wider than suggested by the business and consumer surveys given more weight by the watchdog previously.

MP George Mudie said Chote risked being seen as “charging to the aid of the Chancellor” with the  changes while fellow Labour MP Pat McFadden said it was a “little bit like putting your finger in the air and taking a guess”.

McFadden added that the forecasts “were built on the shakiest of foundations”.

Chote said the accusations the OBR had changed the goalposts to suit the Chancellor was “unfair” and based on a “selective” study of the body’s forecasts.

He said the OBR had also made it more difficult for Osborne to hit the target by lowering its forecasts for the economy’s potential growth over the next  five years.

He told Mudie: “Taking the two things together we have made the Chancellor’s life more difficult rather than easier.

“Based on a representative  rather than a selective view we think the criticism does not  stack up… as I have explained to you repeatedly that is a complete misrepresentation of what  has happened.”

Chote added: “If we were to pull back from our best judgement because we were afraid of you or anybody else being rude to us, we would be no good to you or anybody else.”

The OBR slashed its growth forecasts for this year to -0.1%, and believes the economy will manage an advance of just 1.2% in 2013.

“We have done a good job demonstrating the hazards of economic forecasting,” the chairman said.

Sport
The sun rises over St Andrews golf course, but will it be a new dawn for the Royal and Ancient Golf Club?
sportAnd it's Yes to women (at the R&A)
Arts and Entertainment
Liam Neeson said he wouldn't
tv

Liam Neeson's Downton dreams

Sport
A 'Sir Alex Feguson' tattoo
football

Arts and Entertainment
A spell in the sun: Emma Stone and Colin Firth star in ‘Magic in the Moonlight’
filmReview: Magic In The Moonlight
PROMOTED VIDEO
Voices
voicesApple continually kill off smaller app developers, and that's no good for anyone
Arts and Entertainment
Ben Whishaw is replacing Colin Firth as the voice of Paddington Bear
tv

Thriller is set in the secret world of British espionage

Life and Style
life

News
ebooksAn unforgettable anthology of contemporary reportage
News
ScienceGallery: Otherwise known as 'the best damn photos of space you'll see till 2015'
Life and Style
fashion

Bomber jacket worn by Mary Berry sells out within an hour

Travel
travelWhy Japan's love hotels are thriving through an economic downturn
Arts and Entertainment
Rapper Jay Z performs on the Pyramid Stage at Glastonbury in 2008
musicSinger sued over use of the single-syllable sample in 'Run This Town'
Life and Style
Alexander McQueen A/W 2014
fashionPolitics aside, tartan is on-trend again this season
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Audit Manager Central Functions

To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...

Credit Risk Audit Manager

Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week