UK government under pressure to publish forecasts after budget scrapped – The Guardian

The UK government is coming under mounting pressure to publish economic forecasts after scrapping its plan to hold an early November budget, as Boris Johnson pushes for a snap election before Christmas.

In a development that effectively blocks the release of the forecasts, the chancellor, Sajid Javid, confirmed on Friday he would not deliver his set piece tax and spending event on 6 November as planned. It comes as the government refuses to carry out a detailed impact assessment of its Brexit deal.

The decision means the Office for Budget Responsibility, the Treasury’s official forecaster, will not publish updated growth forecasts and a key health check on the public finances, which was likely to include an assessment of the Brexit plan.

John McDonnell, the shadow chancellor, accused Dominic Cummings, Johnson’s most senior adviser, of forcing Javid to shelve the budget because the OBR report would have revealed spiralling levels of public borrowing and a worsening growth outlook.


What is the Office for Budget Responsibility?

The Office for Budget Responsibility is the government’s independent forecaster, which gives its verdict on the outlook for growth and the public finances twice a year.

The forecasts are published to coincide with the chancellor’s two big set pieces of the year – the autumn budget and the spring statement – and takes into account the impact of any tax and spending measures announced in those statements.

The OBR also uses its public finances forecasts to judge the Treasury’s performance against the chancellor’s fiscal targets, stating whether or not it has a greater than 50% chance of hitting the targets under current policy.

It was established in 2010 by the then chancellor George Osborne with the aim of improving the credibility of the government’s official forecasts for growth. The forecasts were previously produced by the Treasury itself and often criticised for being unrealistic.

The OBR is led by three members of the budget responsibility committee, including chairman Robert Chote, a former director of the Institute for Fiscal Studies, with support from the OBR’s permanent staff of 27 civil servants.

McDonnell said: “We suspect that one of the reasons for Dominic Cummings pulling the budget is that the government has panicked over the publication of accompanying forecasts, which clearly would have exposed the perilous economic situation as a result of its Brexit proposal.

“We are demanding that the OBR’s report be published and are exploring what parliamentary devices are available to secure this.”

Javid has denied being forced to shelve the budget, despite appearing on TV late on Wednesday to say it was still scheduled. He told the BBC’s Today programme on Friday: “It was a decision that I’ve made but with the prime minister because we both agree.”

He added: “The entire cabinet agreed when we had the cabinet meeting [on Thursday]. But the prime minister and I agreed well before that that the most important thing is going to be that we get Brexit done and then we have this general election.”

Paul Johnson, director of the Institute for Fiscal Studies, the tax and spending thinktank, said the government would have been embarrassed by an OBR report saying the public finances and the outlook for growth was worsening.

He added: “We don’t have the official view of the public finances and whatever Brexit scenario they would have run alongside it.

NHS logo

The OBR has already warned that the government is on-track to overshoot its borrowing target by at least £8bn this year, as the prime minister ramps up spending on the NHS, schools and policing. Photograph: Dominic Lipinski/PA

“In a world in which we have an election before we have the next OBR forecasts, I suppose the concern is we’ll end up in the bad old days of people either making up their own forecasts or relying on what we know are very out of date numbers from March.”

The OBR has already warned the government is on-track to overshoot its borrowing target by at least £8bn this year as borrowing levels rise, while the IFS has said the government had effectively abandoned its own tax and spending rules, as the prime minister ramps up spending on the NHS, schools and policing.

Economists joined the criticism on Friday, warning that the government was neglecting its duty to publish detailed analysis about the state of the economy and the public finances. They also cautioned that Javid could break the government’s own rules for managing the economy.

Jagjit Chadha, director of the National Institute of Economic and Social Research, the UK’s oldest independent economic research organisation, said: “There is potential for a complete retreat from rules-based monetary and fiscal policy. A botched spending review and a cancelled budget as well as deafening silence on the next governor.”

The OBR is bound by the charter for budget responsibility, introduced by George Osborne after the financial crisis, to publish two health checks on the economy and public finances in each financial year.

Although it must be ordered to publish them by the chancellor, McDonnell suggested Labour could table parliamentary proposals enforcing publication. The OBR is also understood to be considering what it would need to do in the event they are not commissioned.

Wes Streeting, a Labour MP on the Commons Treasury committee, said the OBR should still publish its forecast and that the chancellor should appear before the committee.

“The cancellation of the budget without a proper explanation is unacceptable,” he said.

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Torsten Bell, chief executive of the Resolution Foundation thinktank, said voters would not have enough detailed information about the Conservatives spending plans for an upcoming election without the independent OBR report.

The OBR last published an assessment of the economy and public finances in March. Since then, Johnson has ramped up public spending while the economy has slumped close to the point of recession, as Brexit uncertainty holds down growth.

Gemma Tetlow, chief economist at the Institute for Government thinktank, said: “The economic and fiscal picture has changed since March. Allowing the OBR to publish its forecast – even without a budget – would help ensure election promises are informed by up to date information.”

UK government under pressure to publish forecasts after budget scrapped – The Guardian