The former chairman of the UK's independent fiscal watchdog has publicly suggested that the Labour Party was not fully transparent about its intentions to raise taxes during the recent General Election campaign.
Manifesto Promises vs. Government Reality
In a significant intervention, Richard Hughes, the ex-chair of the Office for Budget Responsibility (OBR), told a House of Lords committee that Labour's costed manifesto bore little resemblance to the fiscal reality it has implemented since taking power. Mr Hughes stated that while Labour's manifesto outlined raising and spending around £8 billion to £9 billion over the Parliament, its first Budget actually involved £40 billion in tax rises and £70 billion in spending.
"It was nothing like what their actual fiscal plan turned out to be in Government," he told the Lords Economic Affairs Committee. Hughes, who was forced to resign in December after the OBR accidentally leaked key Budget contents, used this first public appearance since leaving to apologise to Chancellor Rachel Reeves. However, he strongly defended the watchdog's integrity, insisting the public can 'trust' it, while acknowledging that "the OBR is led by human beings and human beings make mistakes."
Scrutiny Call and Income Tax Clarification
The former OBR chief levelled criticism at all political parties, suggesting a general inclination to be "less honest" about economic plans during elections. He proposed that party manifestos should be scrutinised by an independent body, as he believed no party presented a "comprehensive and costed financial plan for government" ahead of the 2024 election.
Mr Hughes also directly addressed widespread media reports that Chancellor Rachel Reeves abandoned plans for an income tax rise after receiving better-than-expected OBR forecasts. He made clear this narrative was not 'remotely true'. The OBR had, in fact, informed the Chancellor of a £4.2 billion surplus, yet no effort was made to dispel speculation of a £30 billion shortfall requiring tax increases. This allowed Labour to avoid breaking its manifesto pledge not to raise taxes on 'working people'.
Political Pressure and the Future of the OBR
The OBR finds itself under considerable political pressure. The inadvertent pre-Budget leak damaged its reputation, and Mr Hughes noted the level of speculation before the last Autumn Statement was the greatest he had witnessed in his 25-year career in UK fiscal policy.
Chancellor Reeves has already acted to reduce the watchdog's influence, moving its assessment of the Government's fiscal rules to once a year instead of twice. She faces calls from within her own party to go further and repatriate some forecasting duties to the Treasury. Meanwhile, critics on the right, including former Prime Minister Liz Truss and Reform UK's Nigel Farage, argue the body is too cautious, with Farage suggesting he could scrap it entirely.
In response, Shadow Chancellor Mel Stride pledged that a future Conservative government would protect the OBR, describing it as key to preventing chancellors from "marking their own homework" and arguing Farage's desire to abolish it stems from his sums "not adding up." The Treasury declined to comment when approached.
