The Treasury select committee has demanded that the Office for Budget Responsibility should have its independence enshrined in law, as the Government gears up to establish the organisation in statute later this year.
The committee wants the OBR to be responsible for appointing its own staff, with provision for a small group of non-executive directors to support it. Its report calls for the committee’s power to veto the appointment or dismissal of the chair and the other two members of the budget responsibility committee to be written in statute.
The select committee wants a review of the OBR’s performance, remit and institutional accountability arrangements to be held within five years, including whether it should become a Parliamentary body.
The renewed calls for independence come after the OBR’s first chairman Sir Alan Budd left after just three months, amid accusations he issued public sector job cut forecasts in a way that assisted Prime Minister David Cameron.
Institute for Fiscal Studies head Robert Chote was last week named as new chairman
Select committee chairman Andrew Tyrie says: “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. Picking the right people for the OBR is important but it is not enough.”