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Reform UK will keep Britain’s fiscal watchdog and maintain the Bank of England’s independence if it wins power, the party’s new “shadow chancellor” will say on Wednesday, in a push to calm City of London nerves.
The pledge by Robert Jenrick is in contrast to signals by Reform leader Nigel Farage that the Office for Budget Responsibility could be axed if the populist party wins the next election, expected in 2029.
Farage said last month that the body, which produces market-sensitive economic and fiscal forecasts for the Treasury, was “effectively dictating” policy to the government of the day.
“We have to discuss whether we would be better off without the OBR. I am giving that very serious thought,” he told the Telegraph.
But Jenrick, who last month defected to the party that is leading national opinion polls, will on Wednesday promise to retain the OBR while accusing it of overestimating the economic benefits of low-skilled migration and underestimating the benefits of tax cuts.
“The OBR is far from perfect,” Jenrick will say in a City speech. “But the impetus for its creation was a desire to instil fiscal discipline and that is something we wholeheartedly endorse.”
Jenrick will also pledge to reform the OBR to ensure a “diversity of opinion” around economic forecasts, including by “running competitions for super forecasters” to join and paying “competitive salaries to those who most accurately model the impact of Treasury decisions”.
The BoE under a Reform government would “remain independent”, Jenrick will say, while pledging to boost private sector representation on the nine-strong Monetary Policy Committee, which sets interest rates.
“Our interest will always be keeping inflation low because that is how we will keep people’s bills down,” the former Conservative minister will say.
Speaking at the World Economic Forum in Davos in January, Farage said Reform would “pick different people with a different attitude towards everything to do with economic policy” to run the central bank if it won power.
Set up in 2010 by then Tory chancellor George Osborne, the OBR has in recent years come under increased criticism from Labour and Tory politicians, who argue that its forecasts and costings are playing too large a role in UK government policy.
Richard Hughes resigned as chair of the watchdog after it accidentally published chancellor Rachel Reeves’ November Budget an hour before she delivered it. The Treasury has yet to appoint a successor.
Last month, Conservative shadow chancellor Mel Stride vowed to defend the “vital” role of the OBR in holding chancellors to account, while also proposing reforms to the body’s economic modelling to ensure that it could “fully capture” the growth-enhancing benefits of tax cuts.
Jenrick was named Reform’s economic spokesperson at a press conference on Tuesday where Farage unveiled his party’s “shadow cabinet” in a push to convince voters that it is a credible vehicle for power.
Zia Yusuf was named shadow home secretary, while deputy leader Richard Tice was appointed business and energy spokesperson and former Tory home secretary Suella Braverman was made education spokesperson.