Treasury Committee Chairman Welcomes Chancellor’s Statement On The OBR

These were set out today at Treasury Questions, and in a letter to Mr Tyrie, published on the Committee’s website, together with a letter from Robert Chote, the OBR Chairman.

Mr Tyrie said:

In its report, the Committee stressed that “The most important sign of the OBR's success will be that it establishes and retains a reputation for independence and impartiality.” The Terms of Reference appear to follow closely the recommendations of the Treasury Select Committee on many crucial points. These would give the OBR a good prospect of entrenching its independence.

The Chancellor has already taken the unprecedented step of giving the Committee a veto over the appointment of the Chair of the OBR. The Committee felt strongly that the OBR was to fulfill its independent function, this veto should be extended to the two other members of the Budget Responsibility Committee. I am delighted that not only has the Chancellor said that he "will not appoint a candidate” to the BRC “who is judged unsuitable by the TSC" he intends to give this veto statutory force.

The Chancellor's letter to Mr Tyrie says “I agree that non-executives should play a part in the governance of the OBR and in supporting the BRC and I confirm my intention for there to be a non-executive presence in the OBR”.

Mr Tyrie said: 

We considered that non-executives would play a vital part in safeguarding the independence of the OBR, and welcome the Chancellor's acceptance of their role.

The Treasury Committee was concerned about the resources available to the OBR; the terms of reference contains undertakings that "the Treasury will provide the OBR with appropriate resources to fulfil these Terms of Reference, in particular, to allow the OBR to draw on expertise outside Government to support its remit." 

Mr Tyrie said: 

It is vital that the OBR has the resources it needs. The Committee will monitor this carefully: the Terms of Reference suggest that the Treasury accepts the importance of transparency and separate disclosure, and we will have the information we need to do our work.

The Government will introduce legislation this autumn to establish the OBR on a statutory footing.

Mr Tyrie said: 

The Treasury Committee will examine the legislation on the OBR in detail to ensure conformity with the Committee’s proposals. There may be points where we suggest change. However, the Chancellor’s statement is a strong indication that the legislation will implement the Committee's recommendations.