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The Swedish Fiscal Policy Council in the British debate

22 February 2011

The Swedish Fiscal Policy Council has been referred to in the political debate concerning British fiscal policy and the assessment thereof. The council has been referred to in both the House of Commons and the House of Lords. See below for some excerpts.
Ms Angela Eagle, 14 February, House of Commons:
On the Minister´s point about whether the OBR should use Treasury forecasters, Lars Calmfors, the chair of the Swedish fiscal policy council, has contrasted the arrangements in the Bill with those in Sweden. He said that it is very difficult when the OBR is working very closely with Treasury civil servants and other forecasters:
“one cannot have it both ways—the OBR cannot be both an independent watchdog and an in-house provider of input into the Treasury´s work."
We shall certainly want to explore in greater depth in Committee that aspect of the arrangements for our OBR which differs from the Swedish arrangements.
Mr William Bain, 14 February, House of Commons: The OBR´s role includes responsibility for preparing the Government´s economic and fiscal forecasts and issuing them alongside fiscal forecasts with the Budget. That is clearly helpful to the Government, but it means that Ministers are able to prepare in detail for any consequences of a Budget before the OBR makes its assessments public. Without safeguards, that could lead to concerns about the extent of private consultations between Ministers and the OBR prior to publication—the perceived problem during the release of unemployment data last summer.
As Lars Calmfors, chair of the Swedish Fiscal Policy Council, wrote in The Guardian on 28 July last year:

“It might be better if the OBR provided a post-evaluation of the budget as an input into the work of parliament (in addition to a forecast before the budget)."
Lord Eatwell, 31 January, House of Lords: In Sweden, the Fiscal Policy Council was set up in 2007, once again by an incoming Conservative Government-there is a pattern here. On 18 November last year, the council wrote an open letter to the Government pointing to the discrepancy between its remit and its resources. What was the reaction? The Swedish Minister of Finance is reported to have reacted negatively to the letter and suggested-you guessed it-that the council's budget should be cut in response. Thus in Canada and Sweden-two jurisdictions for which we have great respect-critical reports have resulted in budgets being frozen or cut.