Treasury Committee Criticises Budget Handling by Chancellor

The House of Commons Treasury Committee has initiated an inquiry into the independence and reliability of the Office for Budget Responsibility (OBR) after the body accidentally leaked details of the Chancellor's Budget plans ahead of the official announcement.

The move follows pointed criticism from Dame Meg Hillier, the Committee’s chair, aimed at Chancellor Rachel Reeves regarding the Treasury’s communications, policy reversals, and handling of press briefings in the lead-up to the Budget.

Hillier emphasised the need for reform in how key fiscal information is managed and called for increased autonomy for the OBR, warning that the appointment of its next chair will be subject to cross-party scrutiny.

Committee Launches Inquiry into Budget Watchdog

The Treasury Committee has formally launched an investigation into the OBR’s role and functioning in the wake of a premature disclosure of Budget details. Members of Parliament expressed concerns about the effectiveness and impartiality of the OBR a statutory body responsible for providing independent economic forecasts and analysis on the Government’s fiscal plans.

The inquiry aims to assess whether the OBR remains fit for purpose and whether its independence from ministerial influence can be maintained. This initiative comes as former OBR Chair Richard Hughes resigned after the unintentional publication of embargoed Budget information prior to the Chancellor’s statement.

Dame Meg Hillier underscored the gravity of such incidents, noting that confidence in the Budget process depends on both transparency and procedural discipline.

Concerns over Treasury Briefings and Communication

During the period leading up to the Budget, the Treasury adopted a policy of refusing to answer media queries about the contents of the Budget, leading to considerable speculation.

Chancellor Reeves participated in several interviews and gave an unusual live speech, timed for broadcast on morning television, while her office maintained official silence on policy specifics.

Dame Meg Hillier criticised these practices, stating that legitimate 'pitch-rolling' advance briefings intended to calm markets had been replaced with a less controlled and disruptive approach. She remarked, 'This was less a rolling of the pitch and more like throwing several grenades onto it.'

Independence of the Office for Budget Responsibility

A major focus of the Committee’s inquiry is the independence of the OBR. Hillier insisted that any future appointment to the OBR chairmanship must be fully independent of the Treasury, warning that “consideration of distance from the Treasury will heavily influence our decision to consent or veto” the Chancellor’s selection.

The Government echoed the importance of this independence, with a Treasury spokesperson stating: “This Government is committed to protecting the independence of the OBR and the integrity of our fiscal framework and institutions. Their role is crucial in holding governments to account.”

Critique of Income Tax Policy Shift

One of the central issues highlighted was the Chancellor’s approach to income tax policy. During the Budget’s preparatory phase, Reeves was perceived to have hinted at potential income tax rises, only for the policy to be abandoned shortly before the official announcement.

Hillier described this change of position as a “glaring error”, arguing, “This is not what the process for a Budget should ever be, but what’s worse is the Government then changed its mind, which left everyone either confused or annoyed. This was a glaring error and one from which all at the Treasury must learn.”

Hillier called on the Chancellor to recognise and address these procedural shortcomings, noting, “It is her responsibility to identify and accept the mistakes made within the process she leads and make sure they do not happen again.”

Leak Inquiry and Chancellor’s Response

Following the early leak of Budget proposals and the reversal on income tax policy, Rachel Reeves has categorically denied authorising any briefings about the Budget’s contents prior to the official release.

The Chancellor has since ordered an independent inquiry into the source of the leak. She has reiterated her commitment to maintaining strict confidentiality and ensuring government communication follows established protocols.