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The UK’s Office of Budget Responsibility

The new coalition government in the UK has handed responsibility for its economic and fiscal forecasts to an independent Office of Budget Responsibility:

The Chancellor said the Office for Budget Responsibility (OBR) would give greater credibility to the figures that were unveiled on Budget day…

Accusing the previous Labour government of consistently misleading the public, Mr Osborne said the OBR would be in charge of growth and borrowing forecasts.

“Again and again, the temptation to fiddle the figures, to nudge up a growth forecast here or reduce a borrowing number there, to make the numbers add up has proved too great, and that is a significant part of the reason for our current problems,” he said.

“I am the first Chancellor to remove the temptation to fiddle figures by giving up control of the economic and fiscal forecasts. I recognise that this will create a rod for my back down the line.

“That is the whole point. We need to fix the Budget to fit the figures, not fix the figures to fit the Budget.

Robert Carling and I proposed a similar model for Australia in our CIS Policy Monograph, Fiscal Rules for Limited Government.

 

posted on 23 May 2010 by skirchner in Economics, Fiscal Policy

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