So, Mr Hunt, who really draws up the Budget?
As spending watchdog steps in to tear up his plans, Tories ask...
JEREMY Hunt and Rishi Sunak have been forced to tear up their proposed Budget at the last minute after a watchdog told them it was unaffordable.
Questions were being asked about who is in charge, with the Chancellor and Prime Minister set to spend the weekend in Downing Street recalibrating their plans for the vital pre-election statement after the Office for Budget Responsibility threw it in turmoil.
Their initial package of tax cuts is likely to
‘Making inaccurate forecasts’
be scaled back as a result of the ruling while public spending will have to be trimmed after the election.
Last night leading Conservatives said it was wrong that the Budget was effectively being dictated by an unaccountable quango that has a history of making overly pessimistic predications about the economy.
Sir Jacob Rees-Mogg told the Mail last night: ‘The OBR’s forecasts are amazingly inaccurate and yet it’s been given this godlike status. It’s also got no accountability and the people who run it come from Left-wing think-tanks.’
Former Treasury minister Sir Simon Clarke said: ‘We all want a Budget that reflects our fundamental conviction that lowering taxes can boost the economy and stimulate growth.
‘I recognise the value of the OBR in providing independent assessment, but this responsibility has morphed into their determining what the Chancellor is and is not permitted to do.
‘It is too late for this Budget, but surely it would be better for a Chancellor to be able to proceed with the Budget he/she actually believes in, publishing HM Treasury modelling of the expected results, and for the OBR to set out its assessment in parallel.’
Former Cabinet minister Lord Frost said: ‘The Treasury has allowed the OBR to usurp its own role and effectively to reach judgements for the Government about the economy and about tax and spending policy. It’s high time the OBR was put back in its box as an advisory body.
‘The Government should get back to deciding its own policy and making its own case for it.’
Veteran Tory MP Sir John Redwood said: ‘I’ve been telling them privately that there’s a lot more flexibility than the OBR let on. They always get the deficit wrong and overstate it.’ This newspaper understands that Mr Hunt now looks almost certain to press ahead with plans to trim planned public spending after the election.
Planned real terms growth of 1 per cent a year will be cut back to 0.75 per cent, freeing up £5 billion.
The Chancellor is expected to make the case in the coming days that spending restraint is an essential step in cutting the tax burden. But he is also eyeing a number of ‘revenue raisers’.
He is expected to scrap the existing tax break for non-doms, which could raise billions. A new tax on vapes, coupled with higher taxes on cigarettes, is expected to raise £500 million. Air passenger duty may also rise.