The Trades Union Congress has urged Chancellor John Healey to conduct a comprehensive examination of the Office for Budget Responsibility ahead of his upcoming budget statement on 28 October. The union organization contends that the independent forecaster’s methodological approach impedes investment and economic expansion across the country.
The TUC’s primary criticism centers on how the OBR models the relationship between public and private investment. The organization argues that the forecaster operates on assumptions that public spending displaces private capital, an analytical framework that some economists dispute. TUC General Secretary Paul Nowak characterized the OBR as operating under outdated economic principles, suggesting its analytical foundations remain rooted in austerity-era thinking that no longer reflects contemporary economic understanding.
The call for restructuring the OBR has garnered support from multiple organizations across the political spectrum, including the thinktank Progress and the New Economics Foundation. Jonathan Haskel, recently appointed as the OBR’s next chair, has indicated a more cautious outlook regarding economic prospects than some other forecasters, telling parliamentary committees he expects medium-term interest rates to remain elevated and growth to underperform consensus expectations.
The TUC is additionally pressing the government to expand investment through bodies such as the National Wealth Fund, which operates under fiscal rules that allow government borrowing for investments matched by financial assets. The union recommends extending the NWF’s investment horizon to accommodate projects requiring up to 15 years to generate returns, thereby expanding eligible investment categories. However, some market analysts have expressed concern that loosening fiscal policy without corresponding improvements in public finances could provoke negative reactions from bond markets and undermine confidence in fiscal sustainability.
A Treasury spokesperson responded by reiterating the government’s commitment to fiscal discipline and adherence to established fiscal rules, noting that policy decisions would be announced through formal fiscal events rather than addressed through ongoing commentary on proposals.
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