The Treasury officials under Jeremy Hunt have been accused of breaking the law by failing to report a significant black hole in the public finances to the Office of Budget Responsibility (OBR). This accusation was made by Richard Hughes, the chair of the watchdog, during a hearing on the Budget in front of the Commons Treasury select committee. The controversy arose from claims made by Rachel Reeves that Mr. Hunt did not disclose a £22 billion spending gap before the election. The OBR later revealed that the actual figure was £9.5 billion, but it still had an impact on their calculations.
Despite Mr. Hunt denying the existence of a black hole in the public finances, the OBR’s stance raises concerns about his actions and those of the permanent secretary to the Treasury, James Bowler. Mr. Hughes hinted to the MPs that there might have been a misunderstanding about the law governing disclosures. The OBR confirmed that the previous government did not provide all available information at Mr. Hunt’s last Budget in March, leading to the discovery of £9.5 billion in spending pressures that were not previously disclosed.
During the committee session, Mr. Hughes expressed that the Treasury did not reveal £9.5 billion worth of net pressure on departments’ budgets, which they should have disclosed under the law. He emphasized that this lack of information significantly impacted the forecast and led to a material difference in judgment. This failure to disclose crucial information was deemed a systemic failure in the last forecast.
When asked if the Treasury officials had broken the law, Mr. Hughes reiterated that they did not provide all the necessary information for the OBR to make an accurate forecast. The spokesperson for Sir Keir Starmer mentioned that the OBR’s review highlighted the issues surrounding the £22 billion black hole and recommended improvements in the processes to prevent such incidents in the future. The government accepted all the recommendations made by the OBR, signaling a commitment to transparency and accountability.
In conclusion, the accusations against the Treasury officials under Jeremy Hunt shed light on the importance of transparency in government financial reporting. The need for accurate and timely information for bodies like the OBR to make informed forecasts is crucial for effective policymaking. Moving forward, it is essential for the Treasury to adhere to the legal requirements of disclosing all relevant financial information to ensure the integrity of the budgeting process.
