Treasury Breaches Law by Hiding £9.5 Billion from Economic Forecasts
- Treasury officials may have broken laws by not disclosing significant spending commitments to the OBR.
- Richard Hughes highlighted that the lack of disclosure could have changed the economic predictions made for the March budget.
- This breach of protocol necessitates a reassessment of how the Treasury and OBR interact to avoid future issues.
In a recent hearing, it was revealed that the Treasury may have potentially violated laws by not informing the Office for Budget Responsibility about £9.5 billion of expenditure that should have been included in the March budget. Richard Hughes, the head of the OBR, indicated that this lack of communication could have significantly altered their economic forecasts related to Chancellor Jeremy Hunt's pre-election budget. Hughes confirmed the importance of proper disclosure which was not adhered to in this case. The failure to notify the OBR resulted in unexpected consequences, including a stark financial outlook with implications for future budgets. Hughes emphasized the need for greater scrutiny and verification of departmental budgets to prevent such oversights in the future. He stated a shift in the OBR's relationship with the Treasury towards a more cautious 'trust but verify' approach is necessary. The Treasury's lack of transparency not only endangered accurate forecasting but also posed risks to upcoming fiscal plans, as indicated by concerns raised over Labour's budgetary commitments.