The Telegraph, 3rd December 2025
Abolish the OBR and return the responsibility for fiscal policy to politicians
Richard Hughes, the now-departed Chairman of the OBR, has executed the ritual resignation expected of any quangocrat caught up in a political storm.
The early leak of last Wednesday’s Budget would, on its own, be enough to end most tenures. But the more combustible charge lies in his breakdown in relations with Rachel Reeves, specifically over the Chancellor’s insistence on a mythical £30bn shortfall requiring yet more tax rises.
The OBR, awkwardly for her, concluded that the figures pointed to a surplus. One side was plainly wrong; one side plainly misled. And the Chancellor, already straining public patience, chose to press ahead with pronouncements that did not survive contact with her own officials’ spreadsheets.
But this is not merely another skirmish between a beleaguered minister and a headstrong technocrat. It should prompt a deeper question: what is the point of the OBR at all? The truth – long whispered, rarely admitted – is that the institution is well past its sell-by date. Its leadership may change; its failures do not.
If the Chancellor deserves to go for lying, the OBR deserves scrutiny for the far broader, more entrenched failings it has inflicted on our politics.
The first is its lamentable forecasting record. Since its inception, the OBR has displayed a near-religious optimism bias: over-estimating growth, under-estimating borrowing and inflation and painting pictures of recovery that failed to materialise.
It has consistently over-estimated productivity, which in turn inflated forecasts of earnings growth and income tax receipts. The effect has been to give governments a fictional cushion; headroom that vanished upon contact with reality. Tens of billions of pounds in projected receipts evaporated because the OBR insisted on living in a sunnier economic universe than the one inhabited by the rest of us.
This is not a matter of decimal-point pedantry. These errors shaped Budgets, constrained chancellors and created perpetual fiscal mirages. Even before the pandemic – whose exceptional nature no forecaster should be blamed for – its assumptions were repeatedly found wanting. A decade on, the pattern looks less like misfortune and more like institutional habit.
The second failing is subtler but more politically corrosive: the OBR’s disproportionate influence. A body set up to provide analysis has, by degrees, become a gatekeeper of economic orthodoxy: unelected, unaccountable and treated by ministers as a kind of secular priesthood whose blessing must be sought before any Budget can be unveiled.
Governments have not merely considered its judgment; they have deferred to it. Policy is often pronounced “unworkable” not by Parliament or voters, but by an office whose worldview has hardened into dogma.
I saw this firsthand on the subject of legal migration. My repeated attempts to reduce the numbers ran aground on the OBR’s entrenched assumption that more migration of any type, at almost any wage level, was automatically an economic boon. The costs, pressures and distortions produced by record inflows were waved away.
Housing? Ignored. Millions of foreign nationals claiming benefits? Minimised. GDP per capita? Irrelevant. But the tax contribution made by future migrants? Exaggerated by £6bn, according to the Centre for Migration Control. I would often ask: we’ve had a decade of sluggish growth and record levels of migration.
How, precisely, has migration helped our GDP? No convincing answer was forthcoming. The OBR simply fed more workers into its model and declared GDP larger, as though human beings were interchangeable inputs on a spreadsheet. When reality contradicted theory, it was reality that was dismissed.
Government by modelling is not government. Yet the OBR came to loom over Cabinet discussions like a spectral authority, its verdict treated as final. Ministers nominally in charge of great offices of state found themselves overruled by a set of assumptions so narrow, so brittle, that any challenge was deemed heretical.
And then there is the democratic question. The OBR, like so many creations of Britain’s quangocracy, sits at the intersection of power and unaccountability. It wields extraordinary influence while answering to no electorate.
Its mistakes incur no consequences. Its worldview goes unchallenged because it is embedded, by statute and habit, in the machinery of government. When voters wonder why economic policy feels remote, technocratic, hostile to change, institutions like the OBR sit at the heart of the answer.
The time has come to end the charade. The OBR has to be more than a failed Chancellor’s scapegoat.
Return responsibility for fiscal policy to those who can be questioned, challenged and dismissed. Restore political judgment to politics. We need to stop outsourcing the economic future of the United Kingdom to an institution that has so often failed to understand the country it claims to advise.
Scrap the OBR.
Suella
