Appointment of Robert Chote as Chair of the Office for Budget Responsibility - Treasury Contents

1  The conduct of OBR appointment hearings

1. The Chancellor wrote to the Chairman on 8 September 2010 that his preferred candidate to be Chair of the OBR was Robert Chote, but invited the Committee to conduct a pre-appointment hearing, saying that he would not appoint a candidate who was judged unsuitable by the Treasury Committee.[1] We took evidence from Mr Chote on 16 September. This will be published shortly, together with Mr Chote's answers to our questionnaire and his curriculum vitae.

Professional competence and personal independence

2. This Report is concerned solely with whether we consider the Chancellor's preferred candidate to be suitable as Chair of the Office for Budget Responsibility. Our report on the structure of the future OBR will be published very shortly.

3. The practice of select committees holding appointment hearings was initiated by the previous Treasury Committee following the creation of the Monetary Policy Committee (MPC) in 1997.

4. In 2007 the Governance of Britain Green Paper proposed pre-appointment hearings by select committees for a range of government appointments.[2] Following correspondence between the then Liaison Committee and the Government, a list of posts subject to pre-appointment hearings was agreed along with guidelines governing how they operate.[3] Pre-appointment hearings operating under these guidelines are advisory: the Committee's findings are not binding on the Government. Pre-appointment hearings under these guidelines assess candidates on the basis of personal independence and professional competence—the same criteria that we use to asses MPC appointees.

5. As the Chancellor said in the letter to our Chairman announcing his preferred candidate, the OBR was created "to make independent assessments of public finances and the economy, the public sector balance sheet and fiscal sustainability." The OBR Chair needs both the professional competence to make those assessments, and the personal credibility to ensure that they are seen as independent.

6. We consider that personal independence and professional competence are the criteria we should use in assessing the suitability of the proposed Chair of the OBR. Personal independence is particularly important in this post. The close association between the Government's budget and the work done by the OBR means that the integrity and independence of the Chair must be beyond question if the OBR is to fulfil its purpose of increasing confidence in the statistics produced by government, and the economic analyses underlying policy decisions.

The Committee's veto

7. The Chancellor of the Exchequer announced the creation of the Office for Budget Responsibility (OBR) on 17 May 2010. Appearing before this Committee on 15 July the Chancellor said:

What I would propose to do, of course subject to your approval, is to give this Select Committee a veto on the person nominated by the Chancellor of the day. I think this will be the first time that any select committee has ever had a veto on an appointment. Obviously it is entirely up to you whether you will want to take up that offer, and if you deem it appropriate it will be put in the statute which I propose to present to Parliament later this autumn because I want there to be absolutely no doubt that this is an independent body, that this person has the support and approval of the Treasury Select Committee in undertaking that work, that they come here to give evidence.[4]

The ability to veto the Chancellor's nomination to the Chair of the OBR is a major increase in our powers, and we welcome it. We consider it particularly important that the Chair of the OBR should have the approval of the Committee. Involving this Committee in the appointment process is a significant step in ensuring that the preferred candidate is indeed independent.

1 Back

2   The Governance of Britain, Cm 7170, July 2007 Back

3   Liaison Committee, First Report of Session 2007-08, Pre-appointment hearings by select committees, HC 384 Back

4   Treasury Committee, First Report of Session 2010-11, June 2010 Budget, HC 350, Q 213 Back

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Prepared 21 September 2010