United Kingdom

Bombshell letter shows Chancellor refused expert forecast before mini-budget

A BOMBSHELL letter has revealed that the Chancellor refused to commission a government watchdog to update its economic forecast alongside his mini-budget.

Kwasi Kwarteng did not take the Office for Budget Responsibility’s(OBR) offer of publishing a new forecast despite it having “been in the position to do so”.

In a letter to the Snp’s Westminster leader Ian Blackford and the party’s shadow chancellor Alison Thewliss, the chair of the OBR confirmed that the body sent “a draft economic and fiscal forecast to the new Chancellor on 6 September, his first day in office”.

Blackford showed the letter from OBR chair Richard Hughes to Andrew Marr during an interview on his LBC show.

Hughes’s letter, which was read out by Marr, said: “We sent a draft economic and fiscal forecast to the new Chancellor on 6 September, his first day in office.

“We offered, at the time, to update that forecast to take account of subsequent data and to reflect the economic and fiscal impact of any policies the Government announced in time for it to be published alongside the ‘fiscal event’ planned for later in the month.

“In the event, we were not commissioned to produce an updated forecast alongside the Chancellor’s Growth Plan on 23 September.

“Although we would have been in a position to do so to a standard that satisfied the legal requirements of the Charter for Budget Responsibility enacted by Parliament.”

Blackford MP called it “utterly damning” that the Government failed to commission a forecast from the OBR.

He said: “The revelation that the OBR offered to provide a forecast to the Chancellor to go alongside his fiscal statement last week, but that it was not commissioned by the Tory government is utterly damning.

“This is in spite of the OBR confirming that it was in a position to produce an updated forecast that satisfied the legal requirements of the Charter for Budget Responsibility.

“Over the past week we have witnessed the devastating impact of the Tory budget, hitting people’s mortgages, putting pensions at risk, and hammering household budgets.

“The Prime Minister and Chancellor cannot keep ducking accountability. They must set out why they did not commission economic forecasts from the OBR to accompany their disastrous budget, and they must recall Parliament urgently and reverse their reckless plans.”

The OBR provides independent analysis of the UK’s public finances.

It adds further details to ongoing objections that the Chancellor made his mini-budget, which included £45 billion of tax cuts, without a clear economic forecast to back it up.

Reacting to the letter, SNP MP Alison Thewliss said: “The independent @OBR_UK offered to provide a forecast to the Chancellor to go alongside his fiscal statement last week – this would have set out the full impact of his policies.

“@KwasiKwarteng  clearly decided to refuse that offer – he must now explain why.”

A Treasury spokesperson said: “Last week the Chancellor set out the first stage of the government’s Growth Plan, with more supply side reforms to come in the next few weeks – including announcements on changes to the planning system, business regulations, childcare, immigration, agricultural productivity, and digital infrastructure.

“And the Chancellor has commissioned the OBR to produce an economic and fiscal forecast which will be published on 23 November. He will set out the government’s Medium Term Fiscal Plan alongside this, which will build on the commitment to get debt falling as a share of GDP in the medium term.”

Later, it was reported that the Prime Minister and the Chancellor will be meeting with the head of the Office of Budget Responsibility Richard Hughes on Friday, the latest move to reassure the markets after days of market turmoil following Friday’s mini-budget.

Kwasi Kwarteng is facing calls to bring forward his planned statement setting out how he intends to get the public finances back on track after the OBR said it could produce a preliminary set of forecasts by October 7.

The Chancellor has said he would deliver his medium-term fiscal plan explaining how he would get debt falling as a percentage of GDP, alongside the updated OBR forecasts, on November 23.



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