Louise Haigh Amplifies Demand for OBR Restructuring as Spring Statement Nears
Former transport secretary and prominent soft-left Labour backbencher Louise Haigh has renewed her call for Chancellor Rachel Reeves to overhaul the Office for Budget Responsibility, intensifying pressure just one week before the Spring Statement. In a pointed critique of the Chancellor's economic management, Haigh contends that the current mandate requiring the OBR to produce five-year forecast windows "risks entrenching decline" across the United Kingdom.
Proposal for Extended Forecast Windows to Stimulate Investment
The Labour MP advocates for the introduction of a 10-year forecast framework that would "prioritize investment" and provide governmental incentives to implement policies aimed at enhancing economic supply. Her remarks, published in the New Statesman, challenge Reeves to adopt a more radical fiscal approach following recent adjustments to fiscal rules that exempt new economic forecasts from borrowing and debt assessments during the Spring Statement.
Haigh elaborated: "Limited account or credit is given to other means of reducing debt over time. Proper service reform, which tests and learns how best to meet public needs efficiently, takes years to yield results, extending well beyond the current forecast period. If a reformed OBR produced 10-year forecasts at each Budget, policymakers would be incentivized to prioritize meaningful reforms. This would not serve as an excuse for increased borrowing or delaying fiscal consolidation, but would enable markets to accurately assess fiscal risks."
Persistent Debate Over OBR's Role and Structure
This marks the second instance Haigh has publicly targeted the OBR's existing configuration through written commentary. In September of the previous year, the former Cabinet minister demanded Reeves "rewrite the rules," accusing the government of displaying "excessive deference" toward the watchdog. While major opposition parties have pledged to maintain the OBR, Reform UK's economics spokesman Robert Jenrick emphasized the necessity for "diversity of opinion" within the institution.
Reeves has also received an alternative fiscal framework proposal from the Institute for Fiscal Studies, the leading fiscal think tank. In a recent report, IFS associate director Ben Zaranko suggested transitioning to a traffic light system where the OBR evaluates Treasury management across multiple indicators. Additionally, prior to last year's Budget, former OBR board member and Bank of England economist Sir Charlie Bean recommended greater emphasis on the watchdog's mid-year fiscal risks and sustainability reports.
Broader Economic Context and Parliamentary Scrutiny
Other analysts highlight the substantial debt interest payments incurred by the government in bond markets. The UK is projected to expend over £111 billion on debt servicing in the current financial year, constituting approximately eight percent of total public expenditure and more than double the defense budget. Concurrently, committees in both the House of Lords and the House of Commons are investigating the OBR's forecasting accuracy, influence, and overall performance.
During a session with the Lords' Economic Affairs Committee, former OBR chair Richard Hughes characterized Reeves' fiscal rules as "among the loosest" in the nation's history, noting insufficient "resilience" in UK public finances. Hughes remarked, "If anything, the rules we have at the moment are providing the government the capacity to run a quite significant structural deficit." He is scheduled to appear before the Treasury Committee on Wednesday for further examination.
