Oireachtas Joint and Select Committees

Wednesday, 22 June 2016

Committee on Arrangements for Budgetary Scrutiny

Engagement with Office for Budget Responsibility

10:00 am

Mr. Robert Chote:

The whole structure of the OBR, in contrast to similar bodies in other countries, reflects the fact that the executive is powerful relative to Parliament, something I suspect is true of Ireland too. In our case the Treasury is powerful relative to the rest of the executive in setting budget policy.

In a sense, we have been set up primarily to take politically-motivated wishful thinking out of the analysis the Treasury uses to publish its plans, rather than to help parliamentarians consider alternative policy options. Our relationship with members is very much focused through the Treasury Committee, the committee of the Lower House which is responsible for looking at the work of the Treasury, the Bank of England, ourselves and other economic agencies. They take oral evidence from us after each budget and autumn statement. When the Chancellor of the Exchequer stands up and announces his budget statement, we have already spoken to them about it and, as soon as he sits down, we publish a report on what our forecast for the economy and public finances would have been had the Chancellor done nothing and, then, on the impact of all the measures he has just announced. We give a pre-measures and post-measures forecast, which are published literally as he sits down. Two hours later, I hold a press conference explaining the forecasts and taking questions from anybody who has them. As that happens, the House of Commons goes straight into a debate on the budget without waiting to read anything we or anybody else has said, something which has always slightly puzzled me. Nevertheless, it is a tradition that members get straight into the fight as soon as the Chancellor has sat down. There could be scope for a more informed relationship with a wider range of parliamentarians who are interested.

The relationship at the moment is primarily mediated by the Treasury Committee, which takes evidence from us after each Budget Statement and autumn statement, typically some four or five days afterwards. They start off taking evidence from our equivalent of the ESRI and private sector economists. Then they hear from us and, within a relatively short period, from the Chancellor and Treasury officials. We get very few direct inquiries from members outside that committee but we stand ready to be helpful where we can. There is a lot of interest from Opposition spokespeople on welfare or the economy and we are happy to deal with them. We are required to lay our core publications before Parliament, which is a formal process of literally handing over hard copies to Parliament within a particular timetable so we are limited to publishing some of the big publications when Parliament is sitting.

The Treasury Committee has a veto over the appointment of myself and my two deputies. The finance Minister recommends somebody to do my job but the Treasury Committee has to approve it and the finance minister cannot sack me without the approval of the Treasury Committee. This feature is common elsewhere but it is rare in the UK for a committee to have such a formal role, rather than simply the ability to question people who have been newly appointed to jobs and to discuss their merits etc.

The House of Lords, like the Seanad here, has a more limited constitutional role in financial issues and it is much more rare for me to be asked to speak to the Economic Affairs Committee of the House of Lords. The fact that the interest of parliamentarians is not more widespread may be due to a need to communicate better but it is also a result of the fact that, normally, the executive gets the budget it wants. Parliament occasionally amends it but often not very substantively.