Key facts
- A UK parliamentary committee defended the Office for Budget Responsibility (OBR) against criticism.
A UK parliamentary committee has defended the Office for Budget Responsibility (OBR) against criticism, stating that attacks on the independent economic forecaster are akin to "shooting the messenger." The Treasury committee rejected calls for fundamental reform of the OBR, emphasizing that its forecasts highlight the realities of tight public finances.
The debate highlights the tension between independent economic forecasting and political decision-making, impacting how government spending and fiscal policy are shaped in the UK.
A group of UK MPs has defended the government's independent economic forecaster, the Office for Budget Responsibility (OBR), against criticism, likening the attacks to "shooting the messenger." The Treasury committee rejected calls for fundamental reform of the OBR, arguing that it should not be blamed when policymakers face tough decisions due to tight public finances.
However, the MPs suggested that ministers should consider instructing the OBR to produce a 10-year economic forecast to supplement its existing five- and 50-year projections. They also proposed that Parliament should allocate time to debate the OBR's annual fiscal risks and sustainability report, which outlines threats to public finances over the next five decades.
Dame Meg Hillier, chair of the committee, stated that a review found no truth to claims that the OBR wields excessive power over Treasury ministers and officials. She emphasized that the OBR's forecasts become more critical when government spending operates on narrow margins, a characteristic of chancellors' decision-making rather than OBR overreach.
The OBR was established in 2010 by then-chancellor George Osborne to provide independent economic growth forecasts and assess government tax and spending policies. It has faced criticism for allegedly underestimating austerity impacts and, more recently, overestimating economic growth potential.
Economists Jo Michell and Robert Calvert Jump informed the committee that the OBR's forecasts on spare financial capacity, or "headroom," have become a binding constraint on government spending policies, despite the OBR lacking a democratic mandate for such a role. The committee's review followed the resignation of OBR chair Richard Hughes in December 2025 after an assessment of the previous budget was leaked.
Hillier advocated for preserving the OBR's independent voice in economic debate and suggested exploring longer-term policy effects and economic paths to encourage a move away from short-term thinking.
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