MPs warn Budget watchdog ‘should not be blamed’ for difficult decisions

MPs warn Budget watchdog ‘should not be blamed’ for difficult decisions Members have also rejected “siren calls” for it to be fundamentally reformed in a new committee report. - Bookmark - CommentsGo to comments Politicians ought not to target the UK’s budget watchdog over tough choices caused by strained public finances, a prominent committee of MPs has warned. With chancellor John Healey’s Budget taking place next month, the Commons Treasury Committee insisted that the independence of the Office for Budget Responsibility must be safeguarded. In a newly published report, panel members rejected "siren calls" demanding that the organisation undergo fundamental reform. Attempts to reshape the economic forecaster are frequently driven by an appetite for extra spending leeway, the committee noted, adding that this offers a "poor substitute" for sound economic policy. Committee chairwoman and Labour MP Dame Meg Hillier said: “Certain policymakers and commentators like to characterise the OBR as a wielder of dark powers with a stranglehold on Treasury ministers and officials. It’s simply not true. “The fiscal rules, and therefore the OBR’s forecasts, become more important when government spending operates on razor-thin margins. That is a feature of decision-making by chancellors, not overreach by the OBR. “I do, however, think there is merit in looking at both the potential longer-term effects of government policies and the possible path of the economy further out. “While these will be highly uncertain, it can help to start a debate on how to break the cycle of short-term thinking, which so often holds this country back. “Now is the time to preserve the independent voice within our economic debate, not attempt to undermine it. “I would like to hear our new Chancellor and the wider administration make that point clearly and regularly.” Two five-year forecasts are produced by the OBR each year, to accompany the Budget and the spring statement. The committee has recommended an additional 10-year forecast be produced to sit alongside these. This was endorsed by Professor Douglas Elmendorf, a former director of the US’s Congressional Budget Office, who argued it would allow governments to demonstrate when investments may generate positive outcomes in the longer term. The 10-year forecast would have no bearing on the Government’s current fiscal rules, which would still be assessed with reference to the five-year forecast, the committee said. It has also urged the government to make time for MPs to debate the OBR’s Fiscal Risks and Sustainability report, which contains 50-year forecasts, in Parliament. The government is expected to respond to the committee’s recommendations in the next two months. Join our commenting forum Join thought-provoking conversations, follow other Independent readers and see their replies Comments