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Coalition Government to create independent fiscal watchdog

The Coalition Government is to create an independent fiscal watchdog with responsibility for growth and public finance forecasting.

The Office for Budget Responsibility, with Sir Alan Budd named as interim head, will provide forecasts on growth, public borrowing figures and estimates of future government liabilities.

The OBR will produce new forecasts in time for next month’s emergency Budget .

In an interview with the Financial Times, Osborne says the new Government is “finding all sorts of skeletons in various cupboards” due to decisions made by ministers towards the end of Labour’s administration.

Osborne told the FT that cutting performance related bonuses for top civil servants would be one of a number of measures announced by the new Government. It will outline details of a planned £6bn of efficiency savings this week.

Osborne and Prime Minster David Cameron have both refused to rule out raising VAT in the emergency Budget. Many economists believe VAT could be raised up to 20 per cent to help address the deficit.

Osborne also gave a strong hint that the FSA would be retained with the Bank of England taking responsibility for macro-prudential regulation and oversight of micro-prudential regulation.

He said: “Where micro-prudential regulation takes place- whether it takes place in the FSA or it is removed to the Bank of England- that is for us to resolve as a government.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Sean Fernyhough 17th May 2010 at 9:38 am

    Is this the first new Quango of the new government?

    There are upteen independent bodies – independent and not set-up by the government – that scrutinise this area. So what’s the point.

    The Treasury – under Osbourne’s honest leadership – can produce these forecasts.

  2. jULIAN sTEVENS 17th May 2010 at 12:48 pm

    Also desperately needed and overdue is a body to oversee and regulate regulatory spending.

    The present system of profligacy, incompetence, unaccountability and one barmy new, under-costed initiative after another are crippling the industry, particularly the adviser part of it. How is this supposed to fit in with Nigel Waterson’s grand new vision to reinvigorate the UK’s savings culture?

  3. Well said Julian, pity no one will listen.

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