'Beholden to OBR'

MPs seethe as forecasts derail chancellor's plans

- Jessica Elgot

When Labour was riding high in opposition, the Office for Budget Responsibility was a near-sacrosanct institution. The party's manifesto pledged it would "never sideline the OBR for political convenience".

But emerging from a punishing spring statement, inside No 10 the former devotees have turned sceptics. The fiscal rules remain untouchable - despite Labour MPs' grumbles - but there is intense frustration at the institution that marks the government's homework.

That unhappiness is likely to deepen in June when MPs vote on a £4.8bn package of cuts to disability payments that were designed to make sure the OBR did not judge the chancellor, Rachel Reeves, to have missed her fiscal rules. Officials were particularly annoyed that its forecasters disagreed with Reeves's original estimates for how much the cuts would save, forcing her to make steeper reductions than originally planned.

"The average opinion is now 'I wish we could scrap the OBR'. And the average opinion in September was 'We should strengthen the OBR'," one source said.

"So that shows you how far things have come. But that's the case for lots of things. No 10 in particular is becoming generally more radical, not less."

Change is politically difficult - in September Reeves passed the Budget Responsibility Act, which strengthened the watchdog.

But at the heart of the frustration is a feeling that the OBR is either too cautious or cannot adequately reflect measures that No 10 believes will have a bigger impact on market confidence - changes to the state, planning laws, defence spending, and licensing laws.

Starmer himself has told his closest aides repeatedly recently that he wants to see more radical ideas and expressed how frustrated he is at the pace of change. Last week there was another shake-up of the No 10 policy unit, with two long-serving advisers departing, though on good terms.