Magazine article Public Finance

Osborne to Propose Setting Up an Independent Fiscal Body

Magazine article Public Finance

Osborne to Propose Setting Up an Independent Fiscal Body

Article excerpt

Shadow chancellor George Osborne is expected to outline proposals for a new fiscal framework at the Conservative Party conference later this month.

The set-piece conference announcement will follow months of speculation that the government will break its selfimposed fiscal rules, with debt hovering just below the ceiling of 40% of gross domestic product set in the sustainable investment rule.

In a crucial difference from the government's fiscal rules, which are monitored by the Treasury, the Conservatives look set to adopt the model of an independent panel to oversee performance against the new framework

The idea of separating fiscal forecasting and information from government spending policies by using an independent panel has won support from economists.

The Institute for Fiscal Studies' 2008 'Green Budget' urged that such a body 'should be given access to the same information on the evolution of spending and tax revenues that the Treasury receives to make forecasts of fiscal aggregates'.

Such a panel could be responsible to Parliament rather than ministers and its independence would 'reassure voters and investors that the forecasts were not being massaged to delay politically inconvenient policy adjustments', the IFS suggested. …

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