Chancellor Reeves pushes for growth forecast upgrades amid planning reforms

Rachel Reeves is advocating for the Office for Budget Responsibility (OBR) to revise its growth forecasts for the UK, citing potential economic benefits from Labour's proposed planning reforms. These reforms aim to liberalize the planning system in England and Wales, facilitating the construction of millions of new homes and infrastructure projects. The Treasury has engaged in discussions with the OBR to present evidence that these changes could stimulate economic growth, which would subsequently increase tax revenue. This increase in revenue could provide the Chancellor with additional spending capacity without raising taxes. Reeves highlighted her intentions during a fringe event at Labour's annual conference in Liverpool, expressing her desire to collaborate with the OBR to demonstrate the positive impact of planning reforms on growth. However, she acknowledged the challenges ahead, particularly given the OBR's previous skepticism regarding the effectiveness of similar reforms in the past. For instance, the OBR had previously dismissed the potential growth from planning deregulation under David Cameron's government due to a lack of evidence. The Chancellor's push for an upgrade in growth forecasts is significant as it could influence the upcoming budget scheduled for 30 October. The Treasury is expected to finalize its budget measures in coordination with the OBR, which will provide its economic outlook by 25 October. This process is crucial for Reeves as she prepares her tax and spending decisions, aiming to prioritize investment while adhering to fiscal rules. Ultimately, the success of Reeves' initiative will depend on her ability to provide compelling evidence to the OBR that planning reforms can indeed drive economic growth, a task that has proven difficult in the past due to limited progress in housing and infrastructure development.