Independence of OBR called into question

Economics Editor,Sean O'Grady
Wednesday 14 July 2010 00:00 BST

The credibility and independence of the interim Office for Budget Responsibility came under renewed attack as its leader, Sir Alan Budd, was forced to defend the release of sensitive employment figures just before a difficult session of Prime Minister's Questions.

Appearing before the first meeting of the new Treasury Select Committee, Sir Alan was accused of "naivety" by MPs over they way he allowed the data to be published apparently at the convenience of the governing coalition .

Andrew Tyrie, the newly-elected chairman of the committee, said the release of the statistics two weeks ago had "done quite a bit of damage to the early reputation of the OBR". Andrew Love, the Labour and Co-operative Party MP for Edmonton, accused Sir Alan of being "naive with the way the whole debacle had been handled".

Sir Alan, 73, said that the use the Prime Minister had made his figures was not "appropriate" but insisted there was "no conspiracy or pressure" from the Treasury and denied that a disagreement with the Chancellor was behind his decision to leave the OBR after just three months in the job.

"The events of the past few weeks have been very painful indeed," he added. "I would be deeply sorry if any of the mud that has been thrown at me stuck to the OBR. I do believe it is a brilliant and courageous innovation."

Asked whether David Cameron knew about the employment projections, which the Prime Minister used on 30 June to counter claims that 600,000 public sector jobs would soon be lost, Sir Alan said: "In taking our decision, it was not at all part of my decision or our decision that there was Prime Minister's Questions that day. As far as the Prime Minister's office is concerned I am not sure.

"We do have the practice, rather like the Office for National Statistics, of releasing within the Treasury numbers that are going to put out by us, so that they have prior warning of that. And those numbers had been circulated in the Treasury; I believe they were circulated on the previous Friday."

Sir Alan said the OBR should move out of the Treasury and draw staff from academia and business as well as the Treasury. The former chancellor Alistair Darling called for the proceedings of the OBR to "completely open and transparent". Meanwhile, the Organisation for Economic Co-operation and Development said it believed the coalition's emergency Budget was "courageous and appropriate". "It was an essential starting point," the OECD added. "It signals the commitment to provide the necessary degree of fiscal consolidation over the coming years to bring public finances to a sustainable path, while still supporting the recovery."

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies


Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in