The resignation of Richard Hughes as chair of the Office for Budget Responsibility (OBR) has defused some immediate pressure on Chancellor Rachel Reeves following leaks ahead of the budget, but the row over fiscal transparency is far from over. Hughes stepped down on Monday amid anger over the accidental publication of Reeves's budget, which overshadowed complaints about a “tsunami of leaks” that preceded it.
David Miles, an OBR member, told MPs on Tuesday that leaks were so widespread and misleading that the watchdog feared for its reputation. He confirmed that Hughes had raised concerns privately with Treasury officials, unable to respond publicly before the budget. Reeves herself had publicly criticised the OBR's refusal to “score” pro-growth policies, arguing in September for an ambitious “youth experience scheme” to be scored by the watchdog.
The relationship between Reeves and Hughes was known to be strained, with allies making no secret of their lack of rapport. Some economists said any credible successor would likely seek reassurances that the OBR would not face a similar onslaught in future. Jonathan Portes, a former government adviser, called the resignation “not good for the UK in fiscal governance terms,” while Bank of England Governor Andrew Bailey stressed the importance of the OBR's independence.
Hughes's resignation letter, sent last Friday, reflected weeks of frustration within the OBR. It revealed that the watchdog had assumed Reeves would just meet her fiscal rules even before her gloomy 4 November speech. Miles clarified that the chancellor was right to point to the shaky state of public finances, with “headroom” at the end of the five-year forecast described as “wafer thin.” He also said that an improvement in OBR forecasts reportedly briefed by the Treasury on 14 November “didn't exist,” highlighting concerns about the government's handling of fiscal data.
