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Tories's independent budget watchdog

Source PA News

Updated on 08 December 2009

An incoming Conservative government would have an Office for Budget Responsibility up and running in time for the emergency budget which David Cameron has promised within 50 days of a general election, the party has announced.

Shadow chancellor George Osborne has named former Treasury chief economist and Bank of England Monetary Policy Committee member Sir Alan Budd to oversee the process of setting up the new Office.

Mr Osborne said that the independent OBR would shore up international confidence in the UK by holding the Government to account for its budget promises.

He was speaking as credit rating agency Moody's warned that the UK faces "an inexorable deterioration of debt affordability in the short term" due to a structural public deficit running above 10% of GDP.

Moody's confirmed Britain's AAA credit rating, but placed it in the middle of three categories within the band. The UK's "resilient" rating means that it may "test the boundaries" of the AAA band, but displays the capacity to rebound and reverse its debt problems.

The growing consensus among voters that tax and spending retrenchment is necessary allows the Government room for fiscal manoeuvre, giving it "a high degree of debt reversibility", said Moody's.

Prime Minister Gordon Brown's spokesman said: "Moody's say the US and UK have resilient AAA ratings and all three rating agencies have reaffirmed the UK's triple-A rating this year."

Mr Osborne said: "The Moody's warning is further evidence that Britain faces the disaster of having its international credit rating downgraded unless we get on top of our debts. Conservatives are promising today that by the time of our first budget we will have up and running an Office for Budget Responsibility that will hold a Conservative government to account for the promises it makes to the British people."

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