Fiscal Responsibility Bill

At or around the time of the Budget, and the pre-Budget report, the body will publish not just the forecasts but its view on whether the Government are on course to fulfil the mandate set by the Chancellor—in other words, the elimination of a large part of the structural deficit over the Parliament—and an independent report. Obviously, if the Government were shown to be off course, that would be hugely embarrassing for the Chancellor of the day. I do not think that a Chancellor who regularly disagreed with the independent body could survive for long, so it would pose a challenge to him. This would constitute a proper, serious sanction. In extremis, the Chancellor of the day can overrule the Monetary Policy Committee or the independence of the Bank of England, although of course the question never arises. In this case, the Chancellor of the Exchequer would face a very difficult time if, after he or she had said "We will achieve this fiscal result over the coming years", the independent body, at the time of the Budget, said "Actually, they will not."