Budget Responsibility and National Audit Bill [HL]

My Lords, I have a lot of sympathy with the idea of having independent reviews of forecasts and the methods employed at some intervals during the process. My concern is whether the amendment makes too much of a meal of the issue. It is important to have an appropriate way of appointing an independent person or persons to undertake this work. My preference would be to give this job to the non-executive directors of the OBR. That seems a perfectly respectable way to do this. It is common practice in companies that the independent directors should appoint auditors and should look after other forms of oversight. I cannot believe that a group of five people is needed to undertake this task, which, as the amendment says, is to evaluate forecasts and to look at the methods used. If we are not careful, we will have the same problem as we have had with the MPC—quite soon, one runs out of qualified people to fill a committee. I also have concerns about whether an independent review is needed every year. Not a lot will change each year. We will have one year’s figures in the forecasts and we will be able to look at the outturns. When one is looking at issues relating to bias and variables, one typically needs a run of years to be able to see the pattern of the forecasting record. The Bill suggests that there should be an annual review, but to me the issue is how often one needs independent input into this process. I would be cautious about that. It is a task that one could leave to the non-executive directors, who would decide whether, for example, an independent review was needed every year or whether internal and independent reviews should be held in alternate years. I would leave it to the independent directors, or members of the office, to determine the number of people needed for these investigations, who to recruit and whether to recruit the same people on successive occasions. I support the idea of independent input, but let us not make a meal of it. The task is on a different scale from that in the US example that the noble Lord, Lord Eatwell, cited. We need something of a size that is appropriate to the task in hand.