Dame Meg Hillier rejects calls to reform OBR, defends independence

MPs Reject Calls To Reform OBR

The Treasury Committee rejected calls to fundamentally reform the Office for Budget Responsibility, saying attacks from left and right of the political spectrum amount to shooting the messenger.

Dame Meg Hillier, chair of the committee, said critics sought to characterize the OBR as a wielder of dark powers. She said the committee review found that characterization is simply not true, rejecting claims of overreach by the independent forecaster.

Dame Meg Hillier said fiscal rules and therefore the OBR forecasts become more important when government spending operates on razor-thin margins, a feature of chancellors' decisions.

The MPs said ministers should consider instructing the OBR to adopt a ten-year economic forecast complementing its existing annual projections. The committee also said Parliament should set aside time to debate the OBR's annual fiscal risks and sustainability report fully.

That annual report sets out detailed threats to the stability of public finances over the next 50 years, the independent committee added in its long-term review.

OBR History And Criticism Examined

The OBR was established in 2010 by then chancellor George Osborne to provide independent forecasts of economic growth and tax. It also assesses the impact of the government's tax and spending policies on the public finances over the independent forecast period.

Since its creation, the OBR has faced repeated criticism for underestimating the impact of successive austerity budgets and more recently overestimating the British economy's growth potential.

Prof Jo Michell and Dr Robert Calvert Jump told the committee that the OBR's headroom forecasts have become the binding constraint on British government spending policy.

They said the OBR has now effectively evolved into a key body that determines the bounds of permissible fiscal policy. The economists said the unelected OBR lacks the democratic mandate to fulfil such an important role in British national governance.

The Treasury Committee review followed the December 2025 resignation of OBR chair Richard Hughes after the British government's previous budget assessment was leaked widely to media.

Hillier Urges Preserving Independent Economic Voice

Dame Meg Hillier said now is the time to preserve the independent voice within Britain's critical public economic debate, not attempt to undermine the institution's role.

She said she wants the new chancellor and the wider administration to make that point very clearly and regularly in public. She added that preserving the OBR's independence matters for stable and credible economic policymaking in the modern United Kingdom's national interest.

She also said there is clear merit in examining the potential longer-term effects of government policies and the economy's possible future path beyond the current five years.

Such analysis, while highly uncertain, can actually help start an important public debate on breaking the long-standing cycle of short-term economic thinking in British national politics.

The committee concluded that the OBR should retain its central independent role in producing key official economic and fiscal forecasts. MPs said the forecaster's critics had actually failed to prove that the institution exercises excessive influence over Treasury ministerial decisions.