From 1h agoKey events1h agoShadow chancellor: Labour ‘doesn’t want to rejoin the EU’1h agoEnvironment minister accuses Starmer of ‘flip-flopping’ over BrexitFilters BETAKey events (2)Keir Starmer (5)Rachel Reeves (4)14m ago05.46 EDTBen Quinn
Ministers would have to consult the official watchdog on major tax and spending changes under Labour plans that would prevent a repeat of Liz Truss’s ill-fated mini-budget, the shadow chancellor, Rachel Reeves, has said.
The move would ensure the Office for Budget Responsibility (OBR) was not “gagged” by future prime ministers and chancellors trying to avoid an official financial forecast, she said.
A Labour government would also introduce legislation to ensure that the OBR has the power to independently publish its own impact assessment of any major fiscal event making permanent tax and spending changes, she pledged ahead of a visit on Friday to the London Stock Exchange with the party leader, Keir Starmer.
The plan was announced before the first anniversary of Truss and her chancellor Kwasi Kwarteng’s £45bn spree of unfunded tax cuts in a “mini-budget” that triggered a chain of economic chaos ranging from a sterling slump to soaring mortgage costs.
In a break with tradition, which further spooked international markets, Kwarteng refused to publish the OBR autumn 2022 forecast. When it was published 10 months later after a freedom of information request, it revealed he went ahead with a package of tax cuts despite being told by the OBR that the economy was on course for a year-long recession and that higher interest rates were pushing up the cost of servicing the UK’s debts.
“I’m saying that we won’t allow that to happen again because the OBR will not be gagged,” Reeves told BBC Radio 4’s Today programme on Friday.
The party said ministers would be forced to open their books to the forecasters, though any government wanting to disregard them could seek to reverse the legislation.
Reeves also defended plans to fix budget announcements for the autumn, followed by a spring update in early March, to give families and businesses time to prepare for changes.
Rejecting the assertion that it would make it harder for chancellors to respond to unpredictable events, she said: “This is good international practice, that you set a date for the budget and you stick with it.”
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Labour to strengthen watchdog to avoid repeat of ‘disastrous’ Truss budgetRead more16m ago05.44 EDT
Rachel Reeves denied that Labour was “anti-motorist” because of its commitment to maintain the 2030 ban on petrol and diesel engines.
Rishi Sunak has pushed that deadline for new vehicles back to 2035, in a move criticised by car industry figures who wanted certainty on the shift to electric cars.
Sunak’s announcement that he will delay banning the sale of new petrol and diesel cars by five years to 2035 in a U-turn on the government’s climate commitments has triggered international condemnation and anger…
2023-09-22 04:44:37
Article from www.theguardian.com
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