OBR denies it is 'at war' with Treasury after unprecedented Budget leak

The OBR faced questions from the Commons Treasury Committee today after its Chairman Richard Hughes resigned to allow the watchdog to “quickly move on” from the leak of the Budget.

Asked about the state of relations between the OBR and the Treasury, budget responsibility committee member Professor David Miles described it as “very close” but hoped for a “smoother” budget process next year.

He told the Commons Treasury Committee: “I wouldn’t say we were at war with the Treasury.

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“I mean, we have a very close relationship with the Treasury. In fact, we rely not just on the Treasury but other departments in government for analysis of many sorts of measures.”

He added: “There are lots of very good – from my point of view – economic analysts in the Treasury and we rely heavily upon them.

“I hope we can run a process in the future, and we’ll do everything we can, that is somewhat smoother than the process we’ve just been through.”

Professor Miles added Rachel Reeves’s unusual pre-Budget speech and press conference was not “inconsistent” with the figures she had been given by OBR.

The November 4 speech was viewed as an attempt to roll the pitch for manifesto-busting increases in income tax, with the Chancellor saying the OBR’s downgrade of productivity would have an impact on the public finances.

But actually, by the time the speech was given, the OBR was forecasting that she would remain within her rules of funding day-to-day spending through taxes rather than borrowing by a “very small” margin of £4.2 billion, due in part to the tax impacts of higher wages and inflation.

Prof Miles said: “My interpretation was, and others might interpret differently, that the Chancellor was saying that this was a very difficult Budget and very difficult choices needed to be made.

“And I don’t think that that was in itself inconsistent with the final pre-measures assessment we’d be made, which, although it showed a very small positive amount of so-called headroom, it was wafer thin.”

Despite this, the OBR did raise concerns over the amount of information leaking ahead of the Budget.

He told MPs: “I don’t think there was any formal complaint. We were obviously aware that information seemed to be getting into the press.”

He told the Commons Treasury Committee: “There was lots of information appearing in the press which wouldn’t normally be out there and this wasn’t, from our point of view, particularly helpful.”

Asked if the OBR raised it with the Treasury, he said: “I think it was clear that we didn’t find this helpful. We made that clear.”