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‘Black hole’ in public finances row continues

October 31, 2024
in Business
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‘Black hole’ in public finances row continues
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On Wednesday, the government’s official forecaster published a review in which it said it was not told by the Treasury about “large pressures” on public spending at the time of the March Budget.

The OBR said spending measures totalling £9.5bn were not shared with it, giving a false insight into the state of public finances.

It said “had this information been made available”, it would have reached “a materially different judgement” about government spending in the current financial year.

Its assumption of an underspend of £2.9bn published in its Economic and Fiscal Outlook at the time, would “very likely have been dropped” and instead it would have made a “materially higher” forecast for spending this year.

However, the OBR said it could not say how much higher its forecast for departmental spending would have been.

Reeves raised taxes by £40bn in the Budget, which she partly blamed on the Tories making a “series of promises” which they “had no money to deliver”.

But Hunt told the BBC: “Even if the chancellor is right about this £22bn black hole – and I don’t know anyone who actually believes her – she didn’t increase taxes by £22bn, she increased them by £40bn… this was a conscious choice.”

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