Former Prime Minister Liz Truss has attacked Rachel Reeves’s plan to give the OBR (Office for Budget Responsibility) more power and claimed “she wants to make no decisions about the economy.
The ex-PM’s mini-budget saw her administration shun the OBR when it announced £45billion in unfunded tax cuts in September 2022, scaring off financial markets and leading mortgage rates to soar.
The new Labour government hopes to prevent this from happening again and wants to build confidence among investors and boost economic growth.
A new law expected to be introduced on Thursday will mean the OBR, which independently monitors and checks the UK government’s financial plans, will have the power to make an assessment on announcements over the course of a financial year.
Liz Truss fumed over Labours new plan
GB News
Speaking to Jacob Rees-Mogg on GB News, Truss said: ” We struggled because too much power had been handed over to unelected bureaucrats, they want to double down on that.
“I mean, it’s amazing the Chancellor seems to want to make no decisions about the economy.”
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She added: “I certainly think it’s true that politicians have outsourced a lot of decision-making.
“I mean the the OBR is particularly dysfunctional because the Treasury doesn’t have the expertise to do forecasting, so it can’t do half of the job.
“The OBR doesn’t know all the inside details of what’s actually going on in government, so it can only do half the job. You have a crazy situation. I saw this as Chief Secretary, where the OBR sends new figures every two weeks.
“Suddenly £20bn will appear and suddenly £20bn will disappear according to the particular forecast that week. And that is no way to run to run a country.
“So what has happened? Is it, if you look at Nigel Lawson or Jeffrey Howe, you know, the great Chancellor’s of the 1980s, they had full responsibility for monetary and fiscal policy. They decided we’re monetarists, we’re going to focus on the money supply.
Rachel Reeves plans to give bureaucrats more powerGETTY “What happened is when the Bank of England was independent, they independently decided not to focus on the money supply. So there was no measure of the money supply in their inflation model.
“That wasn’t a political decision, that was just a decision by the Bank of England themselves. So those decisions that have previously been made by chancellors had been outsourced.
“We’ve seen the same now on fiscal policy with Jeremy Hunt, the former Chancellor, saying things like I can’t give duty free access for tourists to London because the OBR tells me no.
Liz Truss is the former Prime Minister
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The lack of an OBR assessment on Truss’s and her chancellor Kwasi Kwarteng’s mini-budget two years ago were seen as a key reason for the lack of investor confidence in the plans.
Prior to the COVID-19 pandemic, the Bank had kept interest rates at a low level but has since raised the base rate in an attempt to bring inflation down.
During her book tour, Truss has constantly defended her record in office as experts, political opponents and much of the general public have blamed the mini-budget on the UK’s economic woes.
“What they’re saying is not borne out by the facts. It’s a smear, it’s a smear,” she shared with LBC.