GOOD ADVICE

GEORGE Osborne deserves credit for his nomination of Robert Chote as chairman of the newly-created Office for Budget Responsibility. It was only two weeks ago that Mr Chote, then director of the highly-respected Institute for Fiscal Studies, issued a report contradicting in considerable detail the Chancellor's claim that his Emergency Budget was “progressive” in character and would not disproportionately penalise the poor.

Treasury officials were angry but Mr Osborne is obviously wise enough to value frank and soundly-based criticism even if he disagrees with it. The idea of the Office for Budget Responsibility as an independent adviser is an excellent one but unfortunately it got off to a bad start in May when Mr Osborne hurriedly appointed Sir Alan Budd, a Treasury establishment figure, as its “independent” interim chairman. Sir Alan quickly saw the illogicality of his position and made it clear that he did not want to stay for long. Mr Chote's appointment to the job, provided that he is approved by the House of Commons Treasury Select Committee, should correct that false start. Yesterday he spoke clearly about the Office's role: “To ensure that tax and spending decisions of this and future governments are informed by demonstrably rigorous and independent analysis of the outlook for the public finances and the economy.” Whether Treasury officials will welcome this new arm of fiscal policy-making is open to question but yesterday it was endorsed by Alistair Darling who will have noted Mr Chote's reference to “future governments”.