(Reuters) – Britain’s finance ministry did not break the law when it gave forecasts to the Office for Budget Responsibility before March’s budget that missed billions of pounds of spending pressures, the Treasury’s top civil servant said on Wednesday.
Last week, the OBR said the Treasury had failed to share information about large upward pressures on day-to-day spending and unusually high spending from emergency reserves.
Britain’s new finance minister Rachel Reeves has accused the former Conservative government of leaving her with a 22 billion-pound “black hole” in the public finances. The OBR said last week it identified 9.5 billion pounds of additional pressures.
On Wednesday, the chair of the OBR, Richard Hughes, told lawmakers that the finance ministry should have been clearer about the spending pressures under legislation which governs the relationship between the OBR and the finance ministry and might have misunderstood its legal obligations.
“We’re clear that the Treasury did act within the law,” Treasury Permanent Secretary James Bowler told parliament’s Treasury Committee.
“It’s because the law is more about what the OBR have the right to ask for, rather than what is provided to them off our own initiative, that we’ve needed to strengthen the framework.”
(Writing by Andy Bruce and David Milliken; Editing by William Schomberg)
