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Treasury to delay publishing OBR forecast by six weeks after 7 October delivery – UK politics live | Politics


Treasury will not publish OBR forecast delivered to them on 7 October until 23 November

The Treasury said that Liz Truss, Kwasi Kwarteng and the OBR discussed the “economic and fiscal outlook” as well as the process for growth forecasts.

However, they said the forecast – which they will receive on 7 October – won’t be published until 23 November. The government also said it “values” the OBR’s scrutiny.

The official readout from the Treasury said:

  • This morning the prime minister, Liz Truss, and chancellor, Kwasi Kwarteng, met with the OBR’s budget responsibility committee, including the chair, Richard Hughes, at No 10 Downing Street.

  • They discussed the process for the upcoming economic and fiscal forecast, which will be published on 23 November, and the economic and fiscal outlook.

  • They agreed, as is usual, to work closely together throughout the forecast process and beyond.

  • The prime minister and chancellor reaffirmed their commitment to the independent OBR and made clear that they value its scrutiny.

Key events

Just over a week ago, this year’s Conservative party conference might have been viewed by Liz Truss as an ideal platform to showcase her vision for Britain after a month in her role as prime minister.

Now – with markets in turmoil and the pound having fallen to record lows after the government’s mini-budget – the Tory faithful will gather at Birmingham’s International Convention Centre from Sunday to Wednesday in very different circumstances.

Here is a cheat sheet from my colleague Ben Quinn, with all you need to know going into next week.

Jennifer Rankin

Jennifer Rankin

EU energy ministers have agreed to levy windfall taxes on energy companies’ profits, and to cut electricity use, but remain at loggerheads over proposals to cap the price of gas.

Meeting in Brussels on Friday, the bloc’s 27 energy ministers signed off on proposals to levy a “solidarity contribution” on fossil fuel producers that have benefited from soaring energy prices.

Revenues of renewable energy and nuclear power companies will be capped in response to the “unexpectedly large financial gains” made in recent months, as a result of their profits being linked to the price of expensive gas and coal, according to an EU statement.

The measures, which together could raise €140bn (£123bn) to help lower consumer bills and fund the switch to green energy across the EU, contrast with the British government’s approach. Liz Truss, the UK prime minister, has ruled out extending the £5bn energy tax introduced by the former chancellor Rishi Sunak.

Truss to appear on Laura Kuenssberg’s BBC show on Sunday

The prime minister will be on the BBC’s Sunday with Laura Kuenssberg this weekend as the Conservative party conference begins, PA Media reported.

Liz Truss will be interviewed on the weekend politics programme, which begins at 8.30am.

The shadow chancellor, Rachel Reeves, will also appear on the show.

The Treasury has restated the full independent analysis by the OBR will be published on 23 November.

In a tweet, the Treasury said the prime minister and chancellor used their meeting with the OBR to reaffirm “their commitment to the OBR’s independence and made clear that they value its scrutiny”.

“The full economic & fiscal forecast will be published November 23,” the department said.

The Liberal Democrats have accused ministers of “allowing the economy to fly blind for two months”, PA Media reported.

Responding to Liz Truss and Kwasi Kwarteng’s meeting with the OBR, the Liberal Democrat leader, Ed Davey, said:

Delaying this forecast means shutting the door long after the horse has bolted.

Liz Truss and Kwasi Kwarteng are allowing the economy to fly blind for two months while their reckless plans cause pension and mortgage misery for millions of British people.

He added:

Families and businesses can’t afford to wait any longer for this government to fix their botched, unfair budget.

Truss and Kwarteng must cancel the Conservative conference, recall parliament and propose a new budget now, before any more people lose their homes or close their business.

Treasury will not publish OBR forecast delivered to them on 7 October until 23 November

The Treasury said that Liz Truss, Kwasi Kwarteng and the OBR discussed the “economic and fiscal outlook” as well as the process for growth forecasts.

However, they said the forecast – which they will receive on 7 October – won’t be published until 23 November. The government also said it “values” the OBR’s scrutiny.

The official readout from the Treasury said:

  • This morning the prime minister, Liz Truss, and chancellor, Kwasi Kwarteng, met with the OBR’s budget responsibility committee, including the chair, Richard Hughes, at No 10 Downing Street.

  • They discussed the process for the upcoming economic and fiscal forecast, which will be published on 23 November, and the economic and fiscal outlook.

  • They agreed, as is usual, to work closely together throughout the forecast process and beyond.

  • The prime minister and chancellor reaffirmed their commitment to the independent OBR and made clear that they value its scrutiny.

OBR to deliver initial forecast to chancellor next week

Following a meeting with the prime minister, Liz Truss, and the chancellor, Kwasi Kwarteng, the Office for Budget Responsibility has confirmed it will deliver an initial forecast on 7 October.

A spokesperson for the OBR said:

[The forecast] will, as always, be based on our independent judgment about economic and fiscal prospects and the impact of the government’s policies.

The announcement comes after a 48-minute emergency meeting at 11 Downing Street this morning.

They added:

We discussed the economic and fiscal outlook, and the forecast we are preparing for the chancellor’s medium-term fiscal plan.

We will deliver the first iteration of that forecast to the chancellor on Friday 7 October, and will set out the full timetable up to 23 November next week.

Members of OBR’s budget responsibility committee leave Truss meeting after 48 minutes

The three members of the OBR’s budget responsibility committee who met the prime minister, Liz Truss, and the chancellor, Kwasi Kwarteng, have now left No 11 Downing Street.

PA Media reported that Richard Hughes, Andy King and Prof David Miles left the building at 10.33am – just 48 minutes after they entered.

Make of that what you will.

We will keep you updated as news lines emerge from that meeting.

(L-R) Chair of the OBR, Richard Hughes, and members of the budget responsibility committee, Andy King and Prof David Miles leaving Downing Street.
(L-R) Chair of the OBR, Richard Hughes, and members of the budget responsibility committee, Andy King and Prof David Miles leaving Downing Street. Photograph: Dan Kitwood/Getty Images

Richard Hughes, Andy King and Prof David Miles – members of the OBR’s budget responsibility committee – walked into 11 Downing Street at 9.45am, PA Media has reported.

More on that as we get it.

Treasury minister claims OBR could not have produced report in time

Jamie Grierson

Jamie Grierson

A Treasury minister has contradicted the UK’s independent watchdog for public finances, saying it would not have been able to produce a forecast in time for the government’s mini-budget.

Andrew Griffith, the financial secretary to the Treasury, told broadcasters the growth plan put forward by the prime minister, Liz Truss, and the chancellor, Kwasi Kwarteng, contained “a lot of detail” and repeatedly asserted it was “40 pages long”, meaning it would have been impossible for the Office for Budget Responsibility (OBR) to have produced an accurate forecast in time.

On Thursday night the OBR confirmed in a letter to an MP that it could have produced an assessment in time but was not asked to do so by the chancellor.

Truss and Kwarteng’s decision not to engage with the OBR over a £45bn package of tax cuts and £60bn energy support package unveiled last Friday has been widely cited by financial experts as one of the key reasons behind market turmoil this week.

Asked by BBC Breakfast why the OBR was not given the opportunity to make an assessment of the plan, Griffith suggested the level of “detail” in the plan made it impossible for the independent watchdog to assess it before the government published it.

The former chancellor George Osborne said plans by Liz Truss and Kwasi Kwarteng to meet the Office for Budget Responsibility on Friday was a “welcome move”.

He tweeted: “In the space of one week we’ve gone from the OBR being dismissed to the PM turning up to its meetings.

“Turns out the credibility of the institution we created 12 years ago to bring honesty to the public finances is more enduring than that of its critics.”

Welcome move by No10 today. In the space of 1 week we’ve gone from the OBR being dismissed to the PM turning up to its meetings. Turns out the credibility of the institution we created 12 years ago to bring honesty to the public finances is more enduring than that of its critics

— George Osborne (@George_Osborne) September 30, 2022

The “detail” of the growth plan made it impossible for an independent watchdog to assess it before the government published it, a minister has suggested.

Asked by BBC Breakfast why the OBR was not given the opportunity to make an assessment of the plan, Treasury minister Andrew Griffith said there was a “lot of detail” in the document.

He added:

This growth plan is full of detail about how this government is going to grow the economy. Forty pages.

Details of infrastructure plans that have been long held up that we are going to crack through, detail about how we are going to bring forward the new clean energy revolution.

It is for the OBR to ultimately decide how they reflect that in their plans.

Pressed about how many pages were in a normal budget document and how quickly the OBR could turn around an analysis of those plans, Griffith said:

To be honest, I am not going to answer that, I just don’t know. It is quite chunky.

The prime minister and chancellor have lost the faith of the markets and the public and will never get it back, Labour has said.

Asked whether Liz Truss’s meeting with the Office for Budget Responsibility will reassure markets, the shadow business secretary, Jonathan Reynolds, told Sky News:

It’s a bit late for that now, isn’t it?

He added:

I cannot stress how angry people should be at this government for what is, without question, one of the biggest unforced errors in policy-making in this country’s history.

Reynolds claimed people and businesses were looking at the “entire approach” of the government and “saying we have no faith in these institutions”. “I will be frank,” he said. “I don’t think either the prime minister or the chancellor will ever get that back.”

Early Truss comments on scrapping benefits stoke fears of further cuts

Pippa Crerar

Pippa Crerar

Liz Truss has previously suggested universal benefits such as the state pension should be scrapped because of the “huge expense” to taxpayers of “recycling” their money through the system – prompting fears she could go further still with her plans to cut back the benefits bill.

The proposal, included in her motion to the Liberal Democrat Youth conference in spring 1995, highlighted the “enormous – and rising – cost of pensions and child benefit”, calling for a “search for realistic alternatives to universal benefits”.

Truss, who left the party the next year to join the Conservatives, had added that it was not “socially desirable to pay out universal benefits in the current fashion”, given the “huge expense to the taxpayers of recycling money through the tax system”.

Child benefit was removed for higher-rate taxpayers in 2013 but remains universal for some families earning below the £50,000 threshold who do not qualify for universal credit. All older people qualify for a state pension and winter fuel benefits.

There is no suggestion Truss plans to scrap either benefit, but her earlier views may raise concerns, as she promised to clamp down on the benefits system during her leadership campaign and has already announced plans to cut working age benefits and for “efficiency savings” across all government departments.

The Lib Dem pensions spokesperson, Wendy Chamberlain, said:

We are seeing this government’s true colours. It’s little surprise Liz Truss is refusing to provide help to those who need it most given she has long wanted to scrap the state pension and child benefits.

The Conservative government could not be more out of touch with the British people. As inflation sky-rockets, interest rates spiral and borrowing surges, they’d rather give tax cuts to banks, massive corporations and billionaires than guarantee support for struggling families and pensioners.

A No 10 spokesperson said:

The prime minister’s views are not the same as they were 27 years ago.

However, Truss continues to argue that taxpayers’ money should not “recycled” – or collected by the state only to be redistributed back to them.

Meanwhile, Liz Truss faces urgent calls from the Treasury select committee to bring forward the government’s financial statement, which is not due until 23 November, by at least a month – and to publish growth forecasts as soon as possible to help calm jitters.

The Treasury select committee’s chair, Mel Stride, told the Guardian there was a path out of the current economic situation for the government, but added:

It’s not a very broad path. There is a lot of work to be done. This is a huge challenge.

The Guardian understands Truss will use this morning’s meeting with the Office for Budget Responsibility to discuss the dramatic economic and fiscal developments since March, the last time the OBR published growth forecasts.

Kwarteng will continue liaising with the body over the forecast process before the release of the next figures.

In other news from Westminster:

  • Liz Truss will attend a meeting of the European Political Community (EPC) in Prague in October, according to PA Media. It is understood the prime minister wanted to attend because energy and migration, both items on the agenda of the meeting, are two of her priorities and she sees the need to work with other European leaders to resolve the issues.

  • A YouGov poll for the Times gives Labour a 33-point lead over the Conservatives, understood to be the biggest gap recorded since the late 1990s.

  • The NASUWT union has given a formal dispute notice to the Department for Education and other employers over its demand for a 12% pay rise for teachers, with the threat of a strike ballot if that is not met.

  • Liz Truss repeatedly suggested that the “international situation” was primarily responsible for the economic turmoil in the UK markets. But in a speech, Huw Pill, the chief economist at the Bank of England, will stress that the mini-budget is a factor, too.

  • Kwasi Kwarteng heightened speculation that benefits won’t be increased in line with inflation. Asked if he would honour the commitment of the previous government, he said: “We are talking about helping people in the round. It is premature for me to come to a decision on that. But we are absolutely focused on making sure that the most vulnerable in our society are protected through what could be a challenging time.”

Liz Truss to hold emergency talks with OBR after failing to calm markets

Good morning and welcome to the UK politics live blog on the day that the prime minister, Liz Truss, is to hold talks with the head of Britain’s independent fiscal watchdog.

The emergency meeting comes as she has so far failed to dampen panic in the financial markets or shore up support from Tory MPs on her radical economic plan.

In a highly unusual move, the prime minister will meet the chair of the Office for Budget Responsibility, Richard Hughes, on Friday, along with her chancellor, Kwasi Kwarteng, before being presented with a first draft of its full fiscal forecasts next week.

One government insider said the OBR meeting was “like trying to read the manual after you’ve broken the thing” after last week’s announcement of £45bn in tax cuts triggered investor panic over the future of the UK economy, prompting a sharp fall in the value of the pound and driving up government borrowing costs.

For more on that emergency meeting, see here.





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