Treasury Committee writes to Chancellor and OBR on potential emergency budget

The Chair of the Treasury Committee has written to the Chancellor of the Exchequer and the Office for Budget Responsibility (OBR) on whether work is being conducted in preparation for a potential emergency budget or significant fiscal event in September.

• Letter from the Chair to the Chancellor of the Exchequer relating to the potential emergency budget, dated 23 August
• Letter from the Chair to the Office for Budget Responsibility relating to the potential emergency budget, dated 23 August
• Treasury Committee

The Treasury usually gives the OBR ten weeks’ notice of a fiscal event, such as a budget, to enable the OBR to provide an independent forecast of the economy and the UK’s fiscal position.

In the correspondence, the Committee seeks an assurance that the Treasury is assisting the OBR on a forecast to be published alongside any emergency Budget or significant fiscal event. It is the Committee’s view that this should at least include all changes to Government policy and economic and fiscal data up to the date the new Prime Minister assumes office.

The Committee also urges the Treasury to assist the OBR in incorporating the impacts of any new policies announced after the Prime Minister has taken office, on a best endeavours basis.

In a letter to the OBR, the Committee asks what forecasting would be possible in the time available, including costings of any measures announced by the new Prime Minister, and any new measures included in an emergency Budget.

Given the significant and immediate economic challenges at present, the Committee has requested a response by Friday of this week.

Chair's comments

Commenting on the correspondence, Rt. Hon. Mel Stride MP, Chair of the Treasury Committee, said:

“OBR forecasts provide transparency and reassurance to the markets on the health of the nation’s finances. As a Committee, we expect the Treasury to be supporting and enabling the OBR to publish an independent forecast at the time of any significant fiscal event, especially where, unlike other recent fiscal interventions, this might include significant permanent tax cuts.

Whether such an event is actually called a budget or not is immaterial. The reassurance of independent forecasting is vital in these economically turbulent times. To bring in significant tax cuts without a forecast would be ill advised. It is effectively 'flying blind’.”