Sep 22, 2023
UK’s Labour Pledges to Hand More Powers to Fiscal Watchdog
Bloomberg News
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(Bloomberg) -- Keir Starmer’s Labour Party vowed to hand more powers to the UK’s independent fiscal watchdog if it wins the next election, and said it would announce all major tax and spending decisions in November with only minor policy changes in spring.
The main opposition party would guarantee in law that the Office for Budget Responsibility can publish a forecast of the impact of tax and spending changes alongside fiscal events, according to an emailed statement on Friday.
The move is aimed at avoiding a re-run of former Conservative Prime Minister Liz Truss’s disastrous “mini budget” a year ago, which was not accompanied by OBR analysis and led to market chaos. Labour is ramping up its attacks on the Tories ahead of a general election expected next year, as Starmer tries to bring the party back to power for the first time since 2010.
Labour also announced a new timetable for budgets that would see the biggest decisions made in by the end of November each year. An update would follow in early March, providing an updated forecast and minor policy changes.
At the moment, significant measures can be announced at both events. The changes were dubbed by Labour as a “fiscal lock” aimed at strengthening Britain’s financial stability.
“Labour will ensure stability returns to our economy and on that rock of stability working people will be better off,” shadow Chancellor Rachel Reeves said in the statement.
Meanwhile Truss, who has recently been intervening more in British politics after her disastrous premiership ended after 49 days last year, hit back at Labour’s plan to bolster the OBR’s powers.
“It beggars belief that Labour think Britain’s problems will be solved by bigger government and even more powers for quangos,” she said. “Hard-working people and businesses - freed from overbearing regulation, tax, and debt - are going to get Britain growing again, not more bureaucrats in London.”
(Updates with Liz Truss response in final paragraph.)
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