Latest news with #budgetresponsibility
Sky News
20 hours ago
- Business
- Sky News
Is there £15bn of wiggle room in Rachel Reeves's fiscal rules?
Are Rachel Reeves's fiscal rules quite as iron clad as she insists? How tough is her armour really? And is there actually scope for some change, some loosening to avoid big tax hikes in the autumn? We've had a bit of clarity early this morning - and that's a question we discuss on the Politics at Sam and Anne's podcast today. And tens of billions of pounds of borrowing depends on the answer - which still feels intriguingly opaque. You might think you know what the fiscal rules are. And you might think you know they're not negotiable. For instance, the main fiscal rule says that from 2029-30, the government's day-to-day spending needs to be in surplus - i.e. rely on taxation alone, not borrowing. And Rachel Reeves has been clear - that's not going to change, and there's no disputing this. But when the government announced its fiscal rules in October, it actually published a 19-page document - a "charter" - alongside this. And this contains all sorts of notes and caveats. And it's slightly unclear which are subject to the "iron clad" promise - and which aren't. There's one part of that document coming into focus - with sources telling me that it could get changed. And it's this - a little-known buffer built into the rules. It's outlined in paragraph 3.6 on page four of the Charter for Budget Responsibility. This says that from spring 2027, if the OBR forecasts that she still actually has a deficit of up to 0.5% of GDP in three years, she will still be judged to be within the rules. In other words, if in spring 2027 she's judged to have missed her fiscal rules by perhaps as much as £15bn, that's fine. Now there's a caveat - this exemption only applies, providing at the following budget the chancellor reduces that deficit back to zero. But still, it's potentially helpful wiggle room. This help - this buffer - for Reeves doesn't apply today, or for the next couple of years - it only kicks in from the spring of 2027. But I'm being told by a source that some of this might change and the ability to use this wiggle room could be brought forward to this year. Could she give herself a get out of jail card? The chancellor could gamble that few people would notice this technical change, and it might avoid politically catastrophic tax hikes - but only if the markets accept it will mean higher borrowing than planned. But the question is - has Rachel Reeves ruled this out by saying her fiscal rules are iron clad or not? Or to put it another way... is the whole of the 19-page Charter for Budget Responsibility "iron clad" and untouchable, or just the rules themselves? 1:17 And what counts as "rules" and are therefore untouchable, and what could fall outside and could still be changed? I've been pressing the Treasury for a statement. And this morning, they issued one. A spokesman said: "The fiscal rules as set out in the Charter for Budget Responsibility are iron clad, and non-negotiable, as are the definition of the rules set out in the document itself." So that sounds clear - but what is a definition of the rule? Does it include this 0.5% of GDP buffer zone? The Treasury does concede that not everything in the charter is untouchable - including the role and remit of the OBR, and the requirements for it to publish a specific list of fiscal metrics. But does that include that key bit? Which bits can Reeves still tinker with? I'm still unsure that change has been ruled out.
Zawya
30-05-2025
- Business
- Zawya
UK finance minister nominates budget watchdog chief for second term
British finance minister Rachel Reeves said on Friday that she had nominated the chair of the Office for Budget Responsibility Richard Hughes to serve a second five-year term. The OBR prepares twice yearly forecasts of British economic growth and public borrowing and assesses whether Reeves is on track to meet her budget goals. Hughes' reappointment is subject to approval by the House of Commons' Treasury Committee. (Reporting by David Milliken; editing by Suban Abdulla)
Bloomberg
30-05-2025
- Business
- Bloomberg
Reeves Nominates UK OBR Chief Richard Hughes for Reappointment
Chancellor of the Exchequer Rachel Reeves nominated Richard Hughes to serve a second term as head of the Office for Budget Responsibility, Britain's powerful fiscal watchdog. Hughes will lead the government's official forecaster for a final five-year term with the OBR's projections highly influential to budget plans set by Reeves. Confirmation of his appointment requires the approval of the House of Commons Treasury Committee — a group of backbencher lawmakers.
Reuters
30-05-2025
- Business
- Reuters
UK finance minister nominates budget watchdog chief for second term
LONDON, May 30 (Reuters) - British finance minister Rachel Reeves said on Friday that she had nominated the chair of the Office for Budget Responsibility Richard Hughes to serve a second five-year term. The OBR prepares twice yearly forecasts of British economic growth and public borrowing and assesses whether Reeves is on track to meet her budget goals. Hughes' reappointment is subject to approval by the House of Commons' Treasury Committee.
