Office of Budget Responsibility criticised for 'taking on board' requests

A former Treasury minister has been accused of appearing to "lean" on the independent finances watchdog after MPs found several "concerning" requests to change forecasts were made.

The Treasury Select Committee believes some of the Treasury's suggestions to the Office for Budget Responsibility (OBR) which aimed to alter the economic and fiscal outlook were "inappropriate" as they "strayed beyond the factual" in December 2014.

These include a Treasury official requesting the watchdog not to describe spending cuts as a "topslice" as it is a "shorthand/slang term", which the committee ruled did not make the document more factually accurate.

Evidence showing two requests for changes by then Liberal Democrat chief secretary Danny Alexander is "particularly concerning" while it is also "unacceptable" a number of Treasury requests appear to have been taken on board by the OBR, the MPs added.

But the cross-party committee added they believe the changes made by the OBR resulted in "no material difference" to its analysis.

It also noted such requests to the OBR appear to have been made "routinely" in the past as it warned the watchdog's independence can be "easily squandered".

The criticism emerged after MPs analysed email exchanges between OBR and Treasury officials, prompted by a report in the Times which suggested the Government department had tried to interfere with OBR forecasts.

Early sight of the OBR's work is intended to ensure facts are correct and there are no mistakes.

But Conservative Andrew Tyrie, the Treasury Select Committee chairman, said it was clear Mr Alexander made requests for non-factual changes to the economic and fiscal outlook.

He said: "This looks like a misjudgment. It gives the appearance of a minister trying to lean on the OBR. The OBR's independence is hard-earned and easily squandered.

"Little or no damage appears to have been done in this case, but this shouldn't be repeated. The Treasury Committee will do what it can to prevent any further such episodes."

Mr Tyrie said a revised memorandum of understanding is needed to make "crystal clear" the reasons for early sight of the OBR's work.

He adding: "Any requests or comments which could be construed as going beyond this should be brought to the attention of the chairman immediately and, if necessary, the chairman of the (Budget Responsibility Committee)."

The committee's report concluded: "A number of Treasury requests for non-factual changes appear to have been taken on board by the OBR. This is unacceptable.

"The removal of words such as 'topslice' to describe spending cuts, and 'complicated' to describe the then Government's fiscal assumption, cannot be held to have improved the clarity of the economic and fiscal outlook, nor did they make it more factually accurate.

"Nonetheless, the committee is satisfied that, on this occasion, the changes the OBR made in response to Treasury requests made no material difference to the analysis contained in the final document."

The MPs also examined a review of the OBR by Sir David Ramsden, the chief economic adviser to the Treasury, which the Government labelled independent.

They noted Sir David was "manifestly professionally incapable" of conducting an independent review as he is a "reliable, highly competent and loyal" Treasury official, reports to Chancellor George Osborne, is bound by the civil service code and has a duty to support Government policy of the day.

The select committee report noted: "It would have been difficult for Sir David to have reached conclusions that differed substantially from those of ministers.

"The fact that the Government accepted his recommendations on the day his review was published, in full and without comment, suggests that he may not have attempted to do so."

The committee added it and Parliament as a whole should also further consider the question of whether the OBR should cost proposals from opposition parties.

It stated: "The committee is unconvinced by the discussion and conclusion on opposition policy costings in Sir David's review.

"First, the review's independence from the Chancellor, whose opinion on this question it reflects in every respect, is highly questionable.

"Second, Sir David did not consult the other political parties about it.

"Third, even among those whom it did consult, it is far from clear where the balance of opinion lies, or that the views they expressed are accurately represented in the report."

A Treasury spokesman said: "In establishing the OBR in 2010, independence and transparency was introduced to economic and fiscal forecasting process for the first time ever, with clear safeguards established to make sure this is protected.

"Officials and ministers have acted entirely properly, respecting that independence, at all times. We will respond formally to this report in due course."