Office for Budget Responsibility

Lord Peston Excerpts

Wednesday 6th July 2011 Lords Chamber

[Lord Sassoon]

My Lords, I am grateful to my noble friend for pointing out the IMF’s recent assessment that endorses the deficit reduction plan, as has the Governor of the Bank of England and just about every other commentator I can think of. That is the plan to which we stick. The third Question this afternoon is on matters related to the Monetary Policy Committee and maybe it would be better to talk about monetary matters then.

[Lord Peston]

My Lords, does the noble Lord look every month as I do at an admirable document published by his own department which is a survey of all the independent forecasts made every month by the leading forecasters in this country? Is he aware that their latest figures show that the economy will grow by 1.5 per cent this year, not exactly the greatest performance ever; it is predicted to grow by 2.1 per cent next year and the medium-term forecast is approximately 2.3 per cent for the three further years? Is he aware therefore that alleged independent Office for Budget Responsibility, in the document quoted with great approval in the Budget Statement this year, predicted that for the three medium-term years the economy would grow at 2.8 to 2.9 per cent? When will he or his right honourable colleague the Chancellor go back to this alleged Office for Budget Responsibility and ask it how it managed to get the three most important numbers it was talking about wrong?

[Lord Sassoon]

My Lords, I recognise the numbers that the noble Lord, Lord Peston, quotes from the excellent monthly publication that the Treasury produces averaging out the independent forecasts. The Office for Budget Responsibility last published a forecast in March. It is obliged to put out forecasts at least twice a year. We can look forward to another one in the autumn and we will see what it has to say then. As to the extraordinary charge of the alleged independence of the Office for Budget Responsibility, I was pleased to see, only within the past couple of weeks, that the noble Lord, Lord Burns, has been appointed as one of the first two non-executive members of the office, which is a sure sign that its independence is going to be very safely guarded.