Labour is set to put its plans to strengthen the budget watchdog to a vote in Parliament in an effort to “prevent a repeat of Liz Truss’s disastrous mini-budget”, Rachel Reeves has said.
The measure would “bring security back to our economy” and stave off a re-run of “last year’s chaos”, according to the shadow chancellor.
She said if Prime Minister Rishi Sunak does not support the proposal, he will prove that he represents the “biggest risk” to the economy.
This will bring security back to our economy and prevent a re-run of last year’s chaos— Rachel Reeves
Labour will force a vote on Tuesday on an amendment it will table to the King’s Speech, criticising the Government for failing to introduce legislation to stop a repeat of the economic fallout from Ms Truss and her chancellor Kwasi Kwarteng’s £45 billion spree of unfunded tax cuts.
One of the reasons the markets were so spooked by their mini-budget was that the pair refused to publish the Office for Budget Responsibility’s (OBR) independent forecasts for the public finances alongside the plans.
Labour wants to amend the rules so the OBR would be able to independently publish the impact of any major fiscal event making permanent tax and spending changes.
The plans would allow for changes to be introduced without forecasts in the case of an emergency, but the OBR would be allowed to set a date to publish its work.
In an article in the Observer, Ms Reeves wrote: “A future Labour government will strengthen the Office for Budget Responsibility so any administration making significant, permanent tax and spending changes will be subject to an independent forecast of its impact.
“This will bring security back to our economy and prevent a re-run of last year’s chaos.
“Next week Labour will put those plans to a vote in Parliament. If Sunak wants to put country first, then he will show the strength to stand up to those in his party that crashed the economy and vote with us.
“If not, he will prove that all he can offer is more of the same and that the biggest risk to the economy is another five more years of the Conservatives.”
