Reeves Urged To Break With OBR Rules To Unlock UK Growth Opportunities

Labour’s economic strategy is coming under scrutiny as Louise Haigh, a leading contender for the party’s deputy leadership, has called for significant reform of the UK’s independent spending watchdog, the Office for Budget Responsibility (OBR). In a bold intervention, Haigh urges Chancellor Rachel Reeves to challenge the “rigid orthodoxy” of the OBR, arguing that the current system is stifling the government’s ambitions for transformation and renewal.

Haigh, who served as transport secretary in Sir Keir Starmer’s cabinet before stepping down due to a past conviction, contends that excessive deference to the OBR is undermining democratic decision-making. She believes forecasts from the watchdog force ministers to shift government policy with little room for manoeuvre, a situation she likens to governing “with one hand tied behind our back”.

Central to Haigh’s argument is the impact of OBR forecasts on fiscal leeway. The watchdog’s projections often prompt the government to rush policy changes, such as welfare reforms, risking backbench rebellions and market instability. “If we let unelected institutions dictate the limits of change, we betray the people and communities who put their trust in us,” she writes, emphasising the need for political accountability over the UK’s economic direction.

Haigh proposes reducing the OBR’s main forecasts from twice yearly to a single annual report, and shifting the focus towards long-term projections beyond the standard five-year horizon. Such changes, she suggests, would allow long-term planning and help Labour deliver on its manifesto pledges without being hampered by short-term assessments.

Alongside these proposed reforms, Haigh recommends limits on the interest the Bank of England pays to commercial banks on their reserves, and a more gradual approach to unwinding quantitative easing. These positions, she claims, could unlock billions in savings for the Treasury and avoid unnecessary losses from the Bank’s current quantitative tightening strategy.

Haigh’s intervention adds to a growing chorus on both the left and right calling for institutional change at the heart of UK economic policymaking. As Reeves prepares for the November Budget against a backdrop of forecasted fiscal shortfall and record tax rises, how Labour responds will shape the economic agenda and test the party’s resolve to prioritise democratic priorities over technocratic caution.