Fresh exodus puts Osborne on the spot

A FURTHER two members of the Office for Budget Responsibility are set to follow chairman Sir Alan Budd out the door, City A.M. has learned, leaving the chancellor’s newly-created economic forecasting body rudderless.

George Osborne, who set up the independent body to lend credibility to the government’s economic forecasts, is now under pressure to appoint a strong team as soon as possible to counter claims the office is being used as an adjunct of government.

Yesterday, Budd announced he would stand down in the summer, while Geoffrey Dicks plans to return to his job as chief economist at Novus Capital. Graham Parker, who came out of retirement to take up his post, will also stand down shortly.

That will leave the three-member body without any of its founding members at a crucial juncture in its genesis.

Andrew Tyrie, the chairman of the Treasury select committee, yesterday called on the government to resolve the situation “as quickly as possible”.

“It’s extremely important to have a strong team for a body of this potential influence. Undoubtedly a problem has been created that must be dealt with as quickly as possible,” he told City A.M.

Tyrie also said it was important that the OBR was accountable to parliament and set up on a “proper statutory basis”.

Yesterday, Treasury officials insisted Budd’s departure was amicable and dismissed suggestions he had left after disagreeing with the chancellor.

Last week, after a leaked Treasury document suggested 1.3m jobs would be lost as a result of Osborne’s Budget, the OBR rushed out its own contrary forecasts a day early, leading to suggestions it had been leant on politically.

But sources close to Budd yesterday insisted he was acting independently. “It was his decision, made because he has a particular objection to leaked data, especially when it’s incorrect,” a member of the OBR’s secretariat said.