'Does it score?' How the OBR became the arbiter for the Treasury's sums

When Rachel Reeves made her speech as shadow chancellor to Labour's party conference two years ago, one of the more niche announcements drew a cheer from the audience.

- Richard Partington

When Rachel Reeves made her speech as shadow chancellor to Labour's party conference two years ago, one of the more niche announcements drew a cheer from the audience. Strengthening the role of the Office for Budget Responsibility might have sounded like a dry measure. But, after the Liz Truss debacle, handing the Treasury watchdog more powers went down a storm in Liverpool.

Next Wednesday will be a different story. Reeves, now chancellor, will present her spring statement to the Commons in response to OBR forecasts that are widely expected to show her self-imposed fiscal rules would be broken without action, providing the momentum behind the government's benefit cuts and plans to choke off other spending. Driving her is a rise in government borrowing costs, weak economic growth and stubborn inflation which are expected to have wiped out all of the £9.9bn headroom she left in October against her main fiscal rule requiring day-to-day spending to be matched by spending receipts within five years.

Things could have been different. This week the former Bank of England deputy governor Charlie Bean warned Reeves against making kneejerk cuts. A "more adult way of proceeding", he said, would be to allow the rules to be breached with a small miss and acknowledge that forecasts can be volatile. That ought to be no big deal, he said. Even if there were concerns, Reeves could take corrective action in less than three months' time at the spending review, or at the autumn budget.