George Osborne points finger at Labour as he launches fiscal watchdog

The Chancellor's Office for Budget Responsibility means the Treasury won't be in charge of forecasting any more.

by
Last Updated: 31 Aug 2010

New Chancellor of the Exchequer George Osborne has been making headlines today: as well as setting a date for his first Budget (June 22), he’s also announced the creation of a new independent fiscal watchdog, the Office of Budget Responsibility, which will henceforth be in charge of overseeing the national accounts. Since the Tories have long advocated this approach, it comes as no great surprise (particularly since it’s a handy way to distance themselves from the sheer horror within). Osborne was also quick to put the boot into his Labour predecessors today: he suggested they fiddled the forecasts to make their Budgets add up, and even grassed up previous Chief Secretary to the Treasury Liam Byrne for a rather ill-judged joke…

After the relatively civilised exchanges between the Tories and Labour after David Cameron moved into Number Ten, Osborne signalled today that the gloves were well and truly off again. In an interview with the FT, he was pretty scathing about the situation he’s inherited from Labour – suggesting that they ‘fixed the figures to fit the Budget’ instead of vice-versa, that he’d been ‘finding all sorts of skeletons in various cupboards’, and that he’d been ‘handed a hospital pass’ over these new hedge fund rules. ‘By the end, the previous Government was totally irresponsible and has left this country with absolutely terrible public finance,’ he raged. Don’t beat around the bush, Georgie, will you?

As further evidence of Labour fecklessness, Osborne and his Chief Secretary David Laws (who appear to be in very close cahoots) revealed that Laws’ predecessor Byrne had left a note saying simply: ‘Dear Chief Secretary, I'm afraid to tell you there is no money left. Yours etc’. Now Byrne protest that this was a private joke. And ordinarily we’d defend to the hilt the use of humour as a way to deal with the stresses of working life. Equally, it’s a pretty accurate summary of the state of play. But still, we can’t help feeling this wasn’t very bright of him.

Osborne’s big idea for the new age of fiscal responsibility is to take budgetary oversight out of the hands of the Treasury and hand it to the (supposedly) non-political OBR, which will be led for the time being by Sir Alan Budd. They’ll then provide the data that the Government will use to prepare its Budget – so there’ll be no chance of reverse-engineering the figures. And they’ll have to get a wriggle on: Osborne’s first ‘emergency’ Budget will be on June 22.

What’s more, he’s going to announce details of the coalition’s £6bn cost-cutting plans even earlier; next Monday, to be precise. Osborne was coy on the details, but suggested the money will come from civil service bonus cuts, better procurement deals (especially for IT) and scrapping ‘wasteful’ projects – all without affecting front-line services, he insists. Time will tell on that score. But either way, these cuts will presumably be the first of many.


In today's bulletin:

George Osborne points finger at Labour as he launches fiscal watchdog
Last-ditch efforts to stop BA strike look ill-fated
Take two for the Pru with rights issue
Lord Sugar sweet on role at stricken FA
MT Expert's Top Ten Tips: Be more emotionally intelligent

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events

Subscribe

Get your essential reading delivered. Subscribe to Management Today