Downing Street Says » Office of Budget Responsiblity

» Tuesday, July 13, 2010

Office of Budget Responsiblity

Asked if there was any reaction to the comments made by Sir Alan Budd this morning where he had claimed the Prime Minister had mistakenly taken credit for slightly lower unemployment projections, when Sir Alan Budd had argued that it was a matter of methodology, the PMS replied that he had not seen Sir Alan Budd’s comments but presumably the question was referring to the decision to have a pay freeze in the public sector.

Put that Sir Alan Budd had argued that the reason for lower unemployment projections was not down to a public sector pay freeze but down to a change in methodology, the PMS said that it was for Sir Alan Budd to describe how his forecasts worked.

The PMS added that it seemed straightforward that if you paid people less and had a pay freeze, then for a given amount of money you could employ more people. The PMS said that the pay freeze enabled the public sector to potentially shed fewer jobs in the short run. These decisions on precise numbers of people employed in the public sector were decisions that would be taken in the context of the spending review.

Asked if there was a long-term plan for where the OBR would be based, the PMS advised people to speak to the Treasury. They had received advice from Sir Alan Budd yesterday and no doubt there would be further discussion about this in Select Committee hearings.

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