Feature: Profile - OBR chairman Robert Chote talks to Gerald Isaaman
Published: 20 January, 2011
by GERALD ISAAMAN
Government ‘watchdog’ Robert Chote talks about the financial crisis, his relationship with George Osborne and the secrets he keeps from cabbies.
ONCE he was a familiar and friendly face on television, fearlessly pulling the economic policies of the political parties to pieces, telling them – and us – what he thought would work and what wouldn’t in sorting out the mess following the world’s worst financial crash in 2008.
Today, after eight years as director of the Institute of Fiscal Studies (IFS), Robert Chote is, at 42, a more benign economist. He is now playing the strong silent type. And, in his new role as permanent chairman of the Office of Budget Responsibility (OBR), he admits he has to keep quiet when he meets Chancellor George Osborne.
That’s because Chote has made a significant change of direction, as the aim of the OBR – the independent watchdog set up by the coalition government – is to monitor the government’s policies to ensure they are on target, rather than offering solutions to the task of reducing the UK’s £100billion-plus budget deficit.
“I saw George Osborne only twice between my appointment last October and our first forecast being published,” he told the New Journal in an exclusive interview.
“It was first to talk logistics and second to present him with our draft forecast so that he could decide whether to announce any tax or spending changes in the autumn.
“He didn’t put any pressure on us to change the forecast, I’m glad to say. Our formal remit is sensibly narrow – to assess whether the government is on course to hit its own targets for the public finances and then to keep them on a sustainable path over the longer term. So while I enjoyed talking about the pros and cons of particular tax and spending measures at the IFS, now I have to bite my tongue.”
His message is not exactly an inspiring one, as yet. “Economists always like to get their defence in early by claiming that now is a uniquely difficult time to forecast the outlook for the economy”, he says. “Normally it isn’t, of course, but the crystal ball is always pretty cloudy. Economic growth is likely to be pretty weak this winter, not least because of the VAT increase. But things should pick up through the rest of the year.
“Public spending cuts, tax increases and the reluctance of banks to lend will all be a drag for some time, but interest rates are low, big companies are sitting on quite a lot of cash, and the past weaknesses of the pound should eventually boost exports.
“Taking it all together, the recovery should be sustained over the-- next few years – but it is likely to be a weaker one than after most previous recessions.”
When he walks up Hampstead High Street from his home in Prince Arthur Road, jumps onto the Tube or takes a taxi, people do seek out his advice – as they do when he has a pint at the Holly Bush or visits the gym at Jack Straw’s Castle.
“A few people do recognise me,” he says. “Someone stopped me, looked me straight in the eye and said, ‘I hope someone knows what they are doing’, and then walked off. I’m still not sure if I was the problem or the solution.
“Requests for mortgage and house-buying advice are an occupational hazard, but I resist the temptation. I tend to be a bit vague about what I do when I’m talking to cabbies, just to avoid that sort of conversation.”
He is conscious too that he is following in the considerable footsteps of the economist Sir Alan Budd, who lives on the other side of the Heath, in Brookfield, Highgate.
Sir Alan’s sustained experience as economic adviser at the Treasury in the 1990s resulted in him coming out of retirement, at 73, to become the initial boss of the OBR for its first three months last summer after Labour had lost the May general election.
The path up the hill to Hampstead has been almost traditional for Chote, brought up in Southampton and moving from St Mary’s College to Queen’s College, Cambridge, before taking a course in advanced international studies at John Hopkins University in America and becoming a reporter and columnist on The Independent, then the Financial Times.
“No one has managed to trace us back very far – there are lots of different spellings of Chote and you don’t have to go back far before we all become illiterate,” he admits. “The Chotes do seem to have been labourers near Hitchin for a while, but I am afraid I haven’t inherited any practical skills from that branch of the family.
“My dad was in the army and then became a financial adviser in Southampton. And I first got interested in economics at school, but my maths wasn’t good enough to be an academic economist – hence journalism.”
He first arrived in Hampstead in the early 1990s. “I had been living in Finsbury Park, had visited Hampstead out of curiosity and was smitten straight away,” he says. “I saw an advert in the newsagent on Holly Bush Hill for a room to let in Baker’s Passage, off the High Street.
“I had a very happy few years there, living in a bizarrely decorated house with numerous disparate tenants passing through. The landlords were great characters and their green chicken curry remains a very fond memory.”
He returned three years ago, this time with his wife, Sharon White, 43, a director-general at the Ministry of Justice, when their second son was on the way and they were then living above a Thai restaurant in Soho.
Joining the OBR was a new challenge after a happy and successful period at the IFS.
“Walking into the Treasury building without an escort certainly felt pretty strange,” he points out.
“I had more meetings in my first eight weeks than in the rest of my working career to date. But there are similarities too – we have a very smart, very hard-working young staff and there is a real sense of enthusiasm for our mission and for the independence with which we pursue it.
“Our job is to shed as much light as we can on the health of the public finances, however uncomfortable the government or the opposition may find that.”
Media speculation over the facts is seen by many as part of the problem in ensuring that the public has an understanding of what is happening. But Chote remains an instinctive reporter and declares: “By and large the media is a force for good in helping people to hold governments to account for the decisions they take in their name,” he declares.
“We can’t guarantee that our forecasts will be accurate. No one can. But we can guarantee that they will be honest and based on our best professional judgment.”
He adds: “Tax increases, spending cuts, rising unemployment and weak economic growth don’t make for the happiest new year, but there should be better times ahead. A big challenge for us this year will be to interest people in the long-term prospects for the public finances and not just the short-term outlook for the economy.
“Reports that many more of us will live to 100 might help focus on the challenge of paying for an ageing population. But we shouldn’t forget the upside of living longer – after all, as the old saying goes, it’s certainly better than the alternative.”