- Jeremy Hunt urges OBR to scrutinize Labour’s fiscal plans
- Concerns over potential changes to fiscal rules for borrowing
- Labour’s Budget Responsibility Bill to require OBR tax package reviews
Last night, Jeremy Hunt called on Britain’s economic watchdog to prevent Labour from ‘fiddling the fiscal laws’.
The former Chancellor will introduce a Commons amendment today that would oblige the Office for Budget Responsibility (OBR) to investigate the implications of Rachel Reeves’s move to reform the fiscal rules that control government expenditure and borrowing.
Ms Reeves has accepted similar regulations to the last Tory government, including provisions that require the national debt to decline as a share of income within five years.
However, in recent weeks, she has dodged questions about whether she will redefine the meaning of debt, potentially allowing her to borrow billions more.
Mr Hunt, the Shadow Chancellor, stated: ‘If Labour fails to support this amendment, it would indicate that the Chancellor intends to manipulate the fiscal rules, resulting in a significant rise in borrowing and debt, with hard-working taxpayers left to pick up the cost.
As with their plans to raise taxes, these are reforms they planned from the start but just lacked the nerve to announce to the British public during the election.
Ms. Reeves will introduce the Budget Responsibility Bill today. It will require the government to obtain an OBR assessment of any tax package costing more than 1% of GDP.
The Chancellor said it was necessary to avoid a repeat of Liz Truss’ disastrous mini-Budget in 2022, which frightened the markets by imposing £50 billion in tax cuts without an OBR review of whether they could be funded.
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However, Mr Hunt stated that modifying fiscal laws might have a comparable impact on borrowing and should be evaluated accordingly.
He told the Mail: ‘If you’re going to claim the mantle of responsibility, that includes modifications to fiscal regulations that would allow you to raise borrowing dramatically.
‘They have already emptied retirees’ coffers by removing the winter heating subsidy, which contradicts their manifesto vow.
‘But if they were to pay for the public sector and pay awards by increasing borrowing by £10 billion per year, as many people believe they would do, they would also be picking the pockets of the young because it would be the young who would have to pay the price in higher interest payments and debt repayments for future generations.
‘That merely proves the age-old adage that there are no winners under a Labour government; old, young, affluent, poor, middle class, and working-class all pay more.
‘And that would be the most cynical thing because it would represent a tax on future generations.’
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