MPs defend OBR against political attacks as 'shooting
A Treasury committee report rejects calls for major reform of the Office for Budget Responsibility, defending its independence.
An influential group of MPs has dismissed political attacks on the UK's official economic forecaster as 'shooting the messenger'. The Treasury committee rejected calls for fundamental reform of the Office for Budget Responsibility (OBR), arguing it should not be blamed for tough policy decisions stemming from tight public finances.
Dame Meg Hillier, chair of the committee, said critics had sought to portray the OBR as 'a wielder of dark powers with a stranglehold on Treasury ministers and officials'. She stated the committee's review found this characterization false. 'The fiscal rules, and therefore the OBR’s forecasts, become more important when government spending operates on razor-thin margins,' Hillier said. 'That is a feature of decision-making by chancellors, not overreach by the OBR.'
Committee recommends forecast extension
While defending the OBR's core role, the MPs proposed one significant change. They were persuaded that ministers should consider instructing the forecaster to adopt a 10-year economic forecast. This would complement its existing five-year and 50-year outlooks.
Parliament should also set aside time to debate the OBR’s annual fiscal risks and sustainability report. That document outlines threats to public finances over the next half-century. Hillier argued that longer-term forecasts, while uncertain, could help break the cycle of short-term thinking.
Academic criticism of OBR's influence
The committee's review heard evidence from critics. Professors Jo Michell and Robert Calvert Jump argued the OBR's forecasts have come to dictate government spending policy undemocratically. They told the MPs that the OBR's calculation of fiscal 'headroom' at the end of its five-year forecast acts as a binding constraint.
'The OBR has evolved into a body that determines the bounds of permissible fiscal policy, despite lacking the democratic mandate to fulfil such a role,' the academics stated. 'It does not merely produce forecasts; it determines whether the government passes or fails its fiscal rules.'
Historical context and recent scrutiny
The OBR was established in 2010 by then-Chancellor George Osborne. Its mandate is to provide independent forecasts of economic growth and assess government tax and spending policies. It has faced criticism from across the political spectrum throughout its existence.
Some accuse it of underestimating the impact of austerity budgets in the 2010s. Others claim it has more recently overestimated the economy's growth potential. The latest Treasury committee review was prompted by the resignation of OBR chair Richard Hughes in December 2025. He stepped down after the body's assessment of a previous budget was leaked.
Hillier called for the current chancellor and administration to clearly and regularly support the OBR's independent voice. The committee's report serves as a defence of the institution's current model against those who would reshape it. It frames the criticism as an attempt to blame the bearer of bad fiscal news rather than address the underlying constraints.
