Treasury โขSelect Committee Chair Questions OBR โฃon Forecast Shifts Amidst Reeves‘ Tax Policy โฃReversal
the Office forโ Budget Responsibility (OBR) โฃisโข facing scrutiny from the Treasury Select โคCommittee over alterations โto itsโฃ economic forecasts in the lead-up to โthe Autumn Statement, coinciding with a significant policy shift by โขShadow Chancellor Rachel Reeves regarding โฃLabor’s planned โtax policies. Committee โขChair Harriett Baldwin has formally requested detailed explanations from โขOBR chief Richard Hughesโค regarding the timing and nature of theseโข revisions,โค raising concerns โฃabout theโฃ independenceโ of the forecasting process โขand โpotential expectation management from theโฃ treasury.
The โinquiry stems from briefings suggesting the OBR’s central forecasts changed substantially after initial rounds ofโ analysis in October, just before Reeves โannounced Labour would be abandoning โa commitment to match the government’s current spending plans -โฃ a โmove widely interpreted as necessitating tax increases. This reversal followed reports of the OBR’sโข forecasts indicatingโ limited fiscal space โขunder a Labourโ government,perhaps jeopardizing key spending โขpledges. The committee’s questions center on whetherโ the โคOBR’s assessments were influenced by, or responsiveโ to, political developments and Treasury โcommunications.
The OBR’s forecasts are crucial as they underpin the government’s Budget โคand provide an independent assessment of the UK โฃeconomy, factoring in areas like productivity growth,โ wageโ increases, inflation, and labour market dynamics. The effects of Budget policies are โassessed in theโ weeks โคpreceding โthe statement. Though, the timing of the โคreported forecast swings,โข coupled โคwith โขleaks from โtheโ Treasuryโ regarding Budgetโ plans, has prompted questions about the integrity โคof the process.
Independent โขeconomist Julian Jessop hasโ stated the reported โchanges “didn’t add up,” fueling โคspeculation about external pressures on the OBR. โReeves herself has publicly condemned the โleaks as “unacceptable,” while Labour Leader Keir Starmer โwarned that such “distractions” could derail the government’s policy โคobjectives. Baldwin’s โขletter specifically addressesโค concerns about โขthese leaks and โฃapparent attempts at expectation management.
The committee’s examinationโค aims โขto clarify the OBR’s methodology, the โขindependence of its assessments, โand the extent to which external factors may have influenced its forecasts – a matter of significantโ importance for maintaining public trust in the UK’sโข economic policymaking process. The outcome of the inquiry โcould lead โto recommendations for strengthening the OBR’s independence andโ transparency.