Magazine article Public Finance

An Alternative to the OBR?

Magazine article Public Finance

An Alternative to the OBR?

Article excerpt

When George Osborne makes his Autumn Statement on November 29, he will tell Parliament what, in broad terms, it will be voting for next year in the Budget. At the same time, the Office for Budget Responsibility will tell us, supposedly objectively, what the chancellor's numbers mean for the public finances. Whatever the OBR says, Parliament will probably do what it is told.

Her Majesty's Opposition is almost always committed to 'restoring power to Parliament'. Her Majesty's Government is almost always committed to the opposite, even when they were only recently the Opposition.

Tony Blair and Gordon Brown were committed in opposition to restoring some of Parliament's control over the public finances. They even spelt out how the government would be held to account by Parliament in the first, 1998, Spending Review. But they ended up treating Spending Reviews in just the same way as governments have treated Budgets for the past century or so - as an unchallengeable package presented to the Parliament as a vote of confidence.

This is strange - Parliament spent several centuries wresting control of the public finances away from the monarch, only to hand it back in the twentieth century to the 'elected monarchs' in Downing Street - the prime minister and chancellor. Parliament still formally authorises expenditure and taxes, but in practice the elevation of any vote to the status of a confidence measure ensures that MPs hardly ever vote on the details - unlike in most other advanced democracies.

The US, as usual, does things very differently. Its 'separation of powers' is meant to ensure a balance between legislature and executive. But by the early 1970s it was felt that power had tilted too far towards the president. The Congressional Budget Office was set up in 1974 to be a counterweight to the president's powerful Office of Management and Budget, which has roughly the equivalent of the tax and spend functions of the Treasury. …

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