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Britain's head of Office of Budget Responsibility to step down

07-07-2010 09:52 BJT Special Report:

LONDON, July 6 (Xinhua) -- Britain's chief of the newly-created Office of Budget Responsibility made a surprise announcement on Tuesday that he is to step down from his job, just under two months after taking it up.

The Office of Budget Responsibility (OBR) was created by new chancellor of the exchequer George Osborne, as one of his first actions on taking up the post in the wake of the formation of the coalition government on May 11. Osborne made Sir Alan Budd its first chairman.

The OBR's job is to make independent assessments of the public finances and the economy, to remove those tasks from political influence.

The OBR has direct control over the forecasts and makes all the key judgments that drive the official projections for government. It has full access to the necessary data and analysis produced by the Treasury, the finance ministry.

The Treasury said, in a statement, "It has always been the case that Sir Alan planned to leave in the summer."

The statement added: "He was appointed to provide forecasts for the emergency budget (on June 22) and to advise on the establishment of a permanent OBR. He has established the OBR as a credible, independent body and the chancellor of the exchequer is incredibly grateful for his important work on this issue."

The statement added that the government will seek to ensure continuity for the OBR in recruiting Sir Alan's successor.

Budd is a respected figure in academic, government and financial circles.

He was a professor at the London Business School, and between 1991 and 1997, under the last Conservative government, he was chief economic adviser to the Treasury, and headed the Government Economic Service.

In 1997 Budd became a founder member of the Monetary Policy Committee (MPC) of the Bank of England, the nation's central bank. The MPC was created by then chancellor of the exchequer Gordon Brown to oversee monetary policy, an area previously the responsibility of the chancellor and his Treasury team.

He is stepping down to take a more active role in private business, however his move is a blow to the newly-formed coalition government.

The OBR is in a temporary state at the moment, and lacks the legislation to fully carry out its intended role. The government will create that legislation but the resignation of the chairman so early in the OBR's life will not bolster business confidence in its role of overseeing government finances.

This is especially true of the coming autumn spending review, widely expected to herald cuts of up to 40 percent in spending in some government departments.

The OBR will be expected to play a key role in overseeing the spending figures and forecasts in the autumn spending review.

Osborne had hoped with the creation of the OBR that he could bolster the credibility of government forecasts with credit agencies and the international money markets. Budd's departure is something of a blow to that hope.

 

Editor:Zhang Pengfei |Source: Xinhua

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