MPs are rallying around the Office for Budget Responsibility (OBR) and supporting its remit ahead of Chancellor John Healey’s Budget statement on October 28.
A cross-party group in Parliament has warned that politicians must not use Britain’s fiscal watchdog as a scapegoat for tough spending choices driven by constrained public finances.
In a new report published ahead of the Chancellor’s next month, the Commons Treasury Committee mounted a robust defence of the OBR’s independence.
The cross-party committee dismissed what it described as “siren calls” for wholesale reform of the economic forecaster.
MPs are urging the Government to not blame the fiscal watchdog for the state of the economy
|
GETTY
In their report, MPs argue that such political pressure typically stems from a wish to unlock greater spending headroom.
Furthermore, the group cautioned that this impulse amounts to a “poor substitute” for developing a coherent economic strategy.
Dame Meg Hillier, the Labour MP who chairs the committee, pushed back firmly against those who portray the OBR as exercising undue influence over the Treasury.
She said: “Certain policymakers and commentators like to characterise the OBR as a wielder of dark powers with a stranglehold on Treasury ministers and officials. It’s simply not true.”
The OBR has previously shared its forecasts for immigration, with the IFS warning a significant drop could hurt the UK economy | IFS
John Healey is under pressure | PA
The watchdog’s forecasts only loom so large because Governments choose to operate with wafer-thin fiscal buffers, she argued.
The peer added: “That is a feature of decision-making by Chancellors, not overreach by the OBR. Now is the time to preserve the independent voice within our economic debate, not attempt to undermine it.”
However, Dame Meg acknowledged that there was value in examining the longer-term trajectory of both government policy and the wider economy.
To that end, the committee proposed that the OBR produce a new 10-year forecast alongside the two five-year projections it currently publishes each year with the Budget and spring statement.
GDP has been downgraded by the OBR for 2026. | OBR
Professor Douglas Elmendorf, who formerly led the US Congressional Budget Office, backed the idea, arguing it would give governments the opportunity to show where investments might deliver returns over a longer horizon.
Crucially, the extended forecast would not alter how the Government’s fiscal rules are judged, which would continue to rely on the existing five-year outlook.
The committee also called on the Government to allocate parliamentary time for MPs to debate the OBR’s Fiscal Risks and Sustainability report, a document that includes projections stretching 50 years into the future.