Liz Truss has been challenged to open up her prospective emergency tax cuts and spending plans to scrutiny if she becomes prime minister and makes immediate moves to tackle the cost of living crisis.
The Office for Budget Responsibility (OBR), which produces independent forecasts based on major fiscal announcements by the government, revealed preparatory work had been under way for about a month to publish fresh economic forecasts in September.
Richard Hughes, the chair of the government’s economic watchdog, said that – if asked by the new chancellor – it could publish its analysis on 14 or 21 September to the legally required standard.
The move puts the ball in Truss’s court and means she would have to decline to ask the OBR to conduct its own analysis, which critics would argue was an attempt to evade scrutiny.
Mel Stride, the chair of the Treasury select committee, said it was vital the next prime minister committed to doing so, while Labour said there was “no excuse” for Truss trying to “wriggle out of proper scrutiny”.
Normally, the OBR gets 10 weeks’ notice of a major fiscal event or budget to begin preparations.
However, the new Tory leader will be announced on 5 September and take office a day later, and would be forced to react quickly to the worsening economic outlook, compounded by spiralling energy bills after the price cap hike.
It was reported by the Financial Times that Truss had downgraded her emergency budget planned for mid-September to a more minor fiscal event to bring in tax cuts and set out her wider economic outlook. It would therefore not necessitate full OBR forecasts about the state of the economy.
But with rocketing inflation and the price cap for average household energy bills rising by 80%, some experts worry that her likely chancellor, Kwasi Kwarteng, would be basing decisions on out-of-date advice without new information from the OBR.
Stride, a Tory MP who is supporting Rishi Sunak in the leadership contest, asked the OBR to ensure it would provide an independent analysis of any upcoming emergency budget or emergency fiscal event.
He welcomed the confirmation it was ready to do so, but piled pressure on Truss to commit to requesting the analysis and said the forecasts “provide transparency on the health of the nation’s finances” to MPs and international markets.
Pat McFadden, Labour’s shadow chief secretary to the Treasury, said: “There’s no excuse for our next Conservative prime minister to try and wriggle out of proper scrutiny before announcing any cost of living measures this September.”
He added Truss and Sunak had been “playing fantasy economics”, in contrast with Labour, which “has a plan to face this crisis and make sure no one pays a penny more on their energy bills, while securing our economy for the future”.
Truss’s campaign has been contacted for comment.
