Chancellor Rachel Reeves is poised to make a critical decision on the future of the Office for Budget Responsibility's chairman today, following a storm of anger within the Treasury. The fury stems from a dramatic leak of Budget details and the independent watchdog's subsequent revelation about the state of the public finances.
The Leak and the Letter: A Double Blow
The Chancellor is expected to receive a formal report on the serious security breach that saw key Budget documents published nearly two hours before the official announcement. OBR head Richard Hughes stated last week he was 'mortified' by the extraordinary leak and pledged to resign if he lost the confidence of both the Chancellor and the Commons Treasury Committee.
However, tensions escalated further when the OBR published a letter to MPs on Friday. This correspondence laid out a timeline showing that the watchdog had informed Ms Reeves it was forecasting a small surplus in the public finances, contradicting her public warnings of a major 'hole'. This has ignited widespread accusations that the Chancellor exaggerated the problems to prepare the public for significant tax increases.
Reeves's 'Wriggling' Defence and Lukewarm Support
Ms Reeves faced tough questioning in interviews yesterday, appearing to wriggle as she was confronted with the OBR's timeline. She maintained her strong support for the OBR as an institution, referencing her reappointment of Richard Hughes in the summer to strengthen its powers, but described the leak as a 'serious breach of protocol'.
Her backing for Mr Hughes himself has been notably tepid. Amid the Treasury's anger over both the leak and the uncomfortable revelations about her pre-Budget briefings, the Chancellor has offered only lukewarm support for the OBR chief. The Treasury issued a rare public rebuke, stating it had been assured such detailed information about private discussions would not 'usually' be made public in future.
Investigation and Fallout
Former national cyber security chief Ciaran Martin has been brought in to advise on the investigation into the leak, although initial indications suggest it was likely caused by human error rather than a malicious hack. The focus now shifts to Ms Reeves's judgement. Did she misrepresent the OBR's forecasts to soften up the nation for tough fiscal measures? The answer to that question is now central to the political and personal fate of Richard Hughes, as the Chancellor weighs her next move in a crisis that has severely damaged trust in the Budget process.
The Treasury, in a statement after the OBR letter's publication, defended the Chancellor's choices, emphasising her focus on cutting the cost of living and hospital waiting lists. It stressed the importance of a 'private space' for policy discussions, welcoming the OBR's confirmation that such disclosures would not become standard practice.
