MPs demand economic forecast alongside Kwarteng mini-budget

MPs demanded that an independent forecast of the UK’s economic outlook be published alongside Chancellor Kwasi Kwarteng’s mini-budget.

Conservative chairman of the Commons Treasury Committee, Mel Stride, said data from the Independent Office for Budget Responsibility (OBR) is essential to “reassure and reassure international markets and investors”.

But the Treasury is refusing to release such a forecast alongside Friday’s so-called tax event, at which Mr Kwarteng is expected to unveil Liz Truss’ plans for sweeping tax cuts and details of the energy price cap , aimed at combating the cost of living. crisis and stimulate growth.

We consider it very important that significant tax changes are announced at a tax event alongside an OBR forecastTreasury Committee Chairman Mel Stride

Investors will be eager to hear details of the cost of the plans, which include the cancellation of the National Insurance hike and the cancellation of the planned corporation tax hike.

The Prime Minister drew criticism and accusations of avoiding scrutiny when she said during the Tory leadership campaign that she would not ask the OBR for forecasts – which would be needed for a budget complete – to accompany his tax event.

The Treasury Select Committee wrote to the Chancellor on Tuesday, insisting that the budget statement should be accompanied by OBR data.

Mr Stride said the commission considers it “very important that significant tax changes are announced at a tax event alongside an OBR forecast”.

“These forecasts are a vital indicator of the health of the country’s finances and provide reassurance and reassurance to international markets and investors,” he said.

The backbench MP, an ally of Ms Truss’ leadership rival Rishi Sunak, said the economic outlook had deteriorated since the OBR’s last forecast in March.

“There have been significant tax interventions since then and we are told there will be further significant interventions, including significant permanent tax cuts which will be announced on Friday.

“In these circumstances, it is essential that an independent OBR forecast is provided.”

The Treasury usually gives the OBR 10 weeks’ notice of a budget to enable it to provide an independent forecast of the UK’s economy and budget situation.

Last month, the OBR confirmed that it may issue a mini-forecast alongside any budget announcements the Prime Minister may wish to make in September.

The body, which is usually required to produce two forecasts a year to accompany the autumn budget and the spring declaration, said it started work on this on July 29, after agreement with the Treasury.

But the government has indicated that no forecast will be released alongside Mr Kwarteng’s mini-budget, underscoring the speed with which the new administration is preparing to enact Ms Truss’s leadership campaign pledges.

A Treasury spokesperson said: “Given the exceptional circumstances facing our country, we have moved with immense speed to provide significant support for household and business energy bills, and are moving quickly to set out new plans. to revive economic growth later this week.”

A No 10 spokesperson also said: ‘The OBR forecast process typically takes 10 weeks. Although we could have asked the OBR to make one for this event, given the need to act quickly, this would involve compromises in the quality and completeness of a forecast. But we remain committed to maintaining the two usual forecasts this fiscal year. »

Both stressed that the government remains committed to maintaining the two usual forecasts this fiscal year.

The refusal to release the OBR data means there will be no independent analysis of whether the announcements comply with the government’s existing fiscal rules, or the impact of tax cuts on growth.