Red Wall MPs urge Starmer to rein in OBR

Telegraph

14-07-2025

Dozens of Red Wall Labour MPs have urged Sir Keir Starmer to rein in the Office for Budget Responsibility (OBR).
The Red Wall Group, made up of about 35 backbenchers in Labour's northern and Midlands heartlands, said estimates by the government's fiscal watchdog must not be treated as a 'crystal ball'.
It comes after a number of high-profile errors in OBR forecasts, which have included underestimating inflation shocks and overestimating the Government's borrowing room by tens of billions of pounds.
Sir Keir attacked the watchdog in the spring for not factoring in the effects of Labour's back to work measures, forcing him to announce further controversial welfare cuts at the last minute.
Jo White, the MP for Bassetlaw and chairman of the Red Wall Group, urged the Prime Minister to acknowledge the OBR's 'limitations' and attach less significance to its twice-yearly forecasts.
Ms White told Politico: 'Red Wall constituents are crying out for change and there is so much potential in what the government is doing, be it in our 10-year NHS plan, infrastructure investment or industrial strategy.
'But to deliver national renewal we need policy and fiscal stability and the OBR has a vitally important role to play in that.
'Fine tuning policy to fit a central estimate that we know will be inaccurate is not the way to do that. To recognise the value of the OBR, we must acknowledge their limitations.'
Andy MacNae, the Labour MP for Rossendale and Darwen, added that the OBR should produce one forecast a year instead of the current two.
'OBR forecasting is an invaluable tool that must be used properly,' Mr McNae said.
'It provides a rough guide – a well-informed guess – as to where the economy might be in four years' time. But the OBR has never claimed to have a crystal ball and we shouldn't treat it as if it does.'
A Cabinet minister defended the role of the OBR on Monday when asked about the backbenchers' demands.
Challenged on whether its numbers should be 'less prominent' in the government's thinking, Darren Jones, the Chief Secretary to the Treasury, told Times Radio: 'The Office [for] Budget Responsibility plays an important part in being the official forecaster for government.
'In the old days the Treasury would take its own internal view and then respond to its own internal view but this government's committed to that being an independent process done by independent experts.'
Earlier this year, an independent review found the OBR was 'vulnerable to bias' because it relies on assumptions made by excessively optimistic politicians.
Liz Truss, the former prime minister, blamed the forecaster in part for the unravelling of her mini-budget and has since called for it to be abolished.
The Prime Minister criticised the OBR in April after it said his cuts to the benefits system would only save £3.4 billion – not the £5 billion the government had hoped.
The watchdog's assessment meant that Rachel Reeves, the Chancellor, had to announce extra welfare cuts the week after Liz Kendall, the Work and Pensions Secretary, announced cuts to sickness and disability benefits.