The Chancellor, Rachel Reeves, has been dealt a severe blow as the UK's fiscal watchdog publicly condemned misleading briefings about its forecasts, escalating the ongoing Budget 'lies' scandal. The dramatic resignation of the Office for Budget Responsibility's (OBR) chair, Richard Hughes, has intensified the political crisis, with senior officials accusing the Treasury of spreading 'unhelpful' information.
Watchdog Forced to 'Set the Record Straight'
Senior OBR officials delivered a stark rebuke to the government during an evidence session with the Treasury Select Committee. Professor David Miles stated the independent body had been compelled to complain to ministers about 'misconceptions' being fostered in the media regarding its economic forecasts.
Professor Miles revealed there was a false perception that the watchdog's forecasts had 'fluctuated' in the run-up to the fiscal statement, something he insisted was 'not the case'. He told MPs that a significant amount of information had appeared in the press which 'wouldn't normally be out there', and that this was 'not from our point of view particularly helpful'. The OBR, however, felt it was not in a position to publicly correct the record at the time.
Resignation and Rising Tensions
The simmering tensions between the OBR and Ms Reeves's team culminated in the sudden resignation of chair Richard Hughes on Monday night. While the official reason cited was the premature publication of Budget documents due to a technical glitch, for which Mr Hughes took 'full responsibility', speculation is rife that months of friction with the Chancellor played a key role.
The relationship had deteriorated notably 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 disclosure exposed that Ms Reeves had continued to talk up dire economic numbers even after being informed the government was on track to run a surplus. The Treasury subsequently stated it had received assurances such transparency would not be 'usual' practice.
Political Fallout and Criticism
The political fallout has spread rapidly, with criticism emanating from both opposition benches and within the Labour Party itself. Tory leader Kemi Badenoch accused Ms Reeves of using the outgoing OBR chief as a 'human shield', while Reform UK's Nigel Farage stated the 'wrong person has resigned'.
More damningly, veteran Labour MP Graham Stringer described the Budget preparation as 'chaotic and appalling'. He warned that both the Prime Minister and Chancellor could face being ousted next year if there is no improvement before crucial local elections in May.
Former Bank of England deputy governor, Sir Charlie Bean, suggested Ms Reeves should have prevented Mr Hughes from resigning, calling him a 'very effective leader'. Meanwhile, the OBR's own report on the Budget leak contained a barbed reference to 'deliberate' leaks, widely seen as a pointed criticism of the Treasury's briefing campaign.
The departure of Richard Hughes, an economist who once remarked he knew 'where the bodies were buried', removes a key figure who could have provided further damaging evidence on the behind-the-scenes wrangling. His resignation, timed after the close of financial markets, leaves the Chancellor braced for the storm to escalate further as the controversy over the handling of the Budget deepens.
