Chancellor John Healey appeared before the Commons Treasury committee to defend the government’s economic plans. During the hearing, Conservative committee member and former Treasury minister John Glen questioned whether Healey was concerned that the Office for Budget Responsibility (OBR) could not identify budget measures with a significant impact on growth. Healey rejected this concern, acknowledging the OBR’s assessment while expressing confidence in the administration’s trajectory.
Confidence in Future Measures
Healey noted that Glen was correct regarding the OBR omitting budget policies from its growth scorecard. However, the chancellor stated that he remained unconcerned because enterprise, devolution, energy, and artificial intelligence initiatives would take effect over the coming months and years to drive growth.
He added: “I’m not terribly worried about that because I believe in the months ahead, and the next year or two, the sort of measures [in the budget] on enterprise I believe, the measures on devolution I believe, the measures on energy and also on AI will start to feed through and we will see that impact on growth.”
The Role of Business Confidence and Forecasts
Addressing the importance of official data, Healey emphasized that while formal figures and forecasts hold value, business confidence is equally critical to the economic outlook. The OBR typically restricts its growth scorecard to policies projected to increase gross domestic product by at least 0.1%.
As reported on the business live blog by Graeme Wearden, Healey also informed the committee that he was “dismayed” by a Bloomberg leak on budget morning indicating the new bank tax would prove less burdensome than the City anticipated.
