Chancellor Rachel Reeves is preparing for a significant escalation in the political row over last week's Budget today, following the dramatic resignation of the head of the government's independent fiscal watchdog.
A Resignation That Raises the Stakes
Richard Hughes has quit as Chair of the Office for Budget Responsibility (OBR), ostensibly taking "full responsibility" for the technical glitch that led to the early publication of sensitive Budget documents. However, his departure comes after months of simmering tensions between the watchdog and the Treasury, casting a long shadow over Chancellor Reeves's fiscal statement.
Speculation is now intense regarding Mr Hughes's next moves and what he might reveal about the behind-the-scenes clashes. The economist, who once remarked he was suited to the watchdog role because he "knew where the bodies were buried", could deliver devastating testimony if he chooses to speak publicly about his dealings with Ms Reeves and her team.
The Core of the Conflict: Forecasts and 'Dire' Numbers
The friction reached a peak last week when Mr Hughes took the highly unusual step of publishing a detailed timetable showing when economic forecasts were supplied to the Treasury. This action exposed that Chancellor Reeves had continued to talk up "dire" fiscal numbers even after being informed by the OBR that the government was on track to run a surplus.
The Treasury responded by stating it had received assurances that such a public breakdown of communications would not become standard practice. Meanwhile, Ms Reeves is said to have viewed Mr Hughes as a "brick wall" for his refusal to include minor effects of trade deals in official forecasts.
Further anger was signalled in the OBR's official report on the Budget leak. Non-executive directors Baroness Hogg and Dame Susan Rice included a veiled criticism of "deliberate" leaks, seen as a pointed reference to a perceived briefing campaign orchestrated by the Treasury itself.
Political Fallout and a 'Human Shield' Accusation
The political repercussions have spread rapidly. Tory leader Kemi Badenoch accused Ms Reeves of using the outgoing OBR chief as her "human shield". "Someone has resigned as a result of the Budget chaos... but it isn't Rachel Reeves," Badenoch stated on social media platform X.
Reform UK leader Nigel Farage MP argued that "the wrong person has resigned today, it should have been Rachel Reeves," claiming the OBR had not "wilfully attempted to mislead the British public".
Criticism is not confined to opposition benches. Veteran Labour MP Graham Stringer described the Budget preparation as "chaotic and appalling", warning that both the Prime Minister and Chancellor could be ousted next year if they fail to improve before vital local elections in May.
With remaining OBR officials due to give evidence to MPs this morning—a session Mr Hughes will now miss—the Chancellor braces for the storm over the Budget's credibility to intensify once more.
