Office for Budget Responsibility Forecasts

Lindsay Hoyle Excerpts

Monday 1st December 2025 Commons Chamber

[The Chief Secretary to the Treasury (James Murray)]

I would like to make a statement to the House on two separate but related matters. The first is regarding communication with the public in the lead-up to the Budget. I understand that this is a topic that has held much interest and speculation over the weekend and I would like to take this opportunity to give a formal statement to the House on the Government’s position. Secondly, the Government have also today received the results of the Office for Budget Responsibility’s investigation into the early release of the “Economic and fiscal outlook” at the Budget last week. I know that the House will be concerned to know the findings of that report, and I will turn to that in a moment.

On the first point, the Chancellor has been consistent and up front with the public about her considerations in the lead-up to the Budget last week. First, she was clear on her priorities at the Budget, which were to cut NHS waiting lists, to cut the cost of living and to cut our debt and borrowing. The Budget delivered on those priorities. Secondly, she was clear on 4 November that a lower productivity forecast would mean lower tax receipts. The OBR confirmed at the Budget that tax receipts are £16 billion lower as a result of the reduced productivity forecast.

Thirdly, the Chancellor was clear on 4 November that she intended to build more headroom. She has done that, with headroom against the stability rule of £21.7 billion. Fourthly, she was clear in the summer that the policy decisions we took on welfare would need to be paid for at the Budget, and the Budget document shows those decisions costing £6.9 billion in 2029-30. Finally, the OBR has now confirmed that the Chancellor knew on 4 November that she had only £4.2 billion of headroom against her fiscal rules, meaning that once the cost of those policy decisions was accounted for, there would be a deficit of £2.7 billion against the stability rule.

The combined effect of this information is that on 4 November, the Chancellor knew that the Government would be in deficit against the stability rule before any of this Government’s priorities for the Budget had been delivered, or any additional headroom built. In the light of that information, and knowing about the OBR’s productivity downgrade, the Chancellor knew on 4 November that challenging decisions would be required on tax and spend. The subsequent decision to freeze personal tax thresholds for a further three years shows that this was correct.

The Chancellor took the step of delivering a speech before the Budget, precisely so that she could be up front about the circumstances that she was facing and the decisions that she would need to take. She has been honest and consistent with the public in everything she has said.

Last Wednesday, before the Chancellor began her Budget speech, the Office for Budget Responsibility published its entire “Economic and fiscal outlook” online. Let me be clear: this is a very serious breach of highly sensitive information. It is a fundamental breach of the OBR’s responsibility; it is a discourtesy to this House, and it should never have happened. The OBR rightly took full responsibility and issued an apology to the Chancellor later that day. It has conducted an investigation into how the report came to be published prematurely, and it sent its report, including its findings, to the Treasury and the Treasury Committee today at 12.30 pm. The report states:

“We are in no doubt that this failure to protect information prior to publication has inflicted heavy damage on the OBR’s reputation. It is the worst failure in the 15-year history of the OBR.”

It adds that the

“responsibility for the circumstances in which this vulnerability occurred and was then exposed rests, over the years, with the leadership of the OBR.”

The report notes that this has

“inflicted heavy damage on the OBR’s reputation”,

and caused significant disruption on Budget day,

“to the Chancellor’s disadvantage”.

The report goes on to make it clear that a significant and long-standing issue has allowed external users to gain early access to the OBR’s publication, which contains full details of its forecasts and the Chancellor’s Budget.

In the days since the Budget, there has been speculation about the kind of error that led to the “Economic and fiscal outlook” being published early. The report today confirms that the cause was not

“simply a matter of pressing the publication button on a locally managed website too early.”

The report concludes that the cause of the OBR’s error was “systemic issues”, and that the investigation has made it clear that

“the problem exposed last week was not a new one.”

Indeed, the report reveals that the OBR’s EFO in March was accessed before the Chancellor delivered the spring statement to the House. That underlines just how serious the situation is. Let me underline that as a Government, we take seriously the need to ensure that the OBR never allows this to happen again.

The report notes that common and fairly basic protections to prevent early access, including passwords and random-character URLs, were not used. It further notes that two configuration errors, which were not understood by the OBR’s online publishing function, prevented the safeguards in its online publishing software from being effective.

I am also very concerned that the report notes that

“it is very likely that the weaknesses that caused the premature accessing of the November 2025 EFO were pre-existing. Indeed, it appears that the March 2025 EFO was accessed prematurely”.

These findings are very serious indeed. The fact that market-sensitive information was prematurely accessible to a small group of market participants is extremely concerning, and the fact that this may have been the case on more than one occasion makes the situation even more severe. We do not know at this stage the extent to which market behaviour may have been affected on this or other occasions as a result of information being available early.

I want to share one further bit of information from the report with the House. On the morning of the Budget, the first IP address to successfully access the EFO had made 32 prior attempts that day, starting at around 5 am. That volume of requests implies that the person attempting to access the document had every confidence that persistence would lead to success at some point. Unfortunately, that leads us to consider whether the reason they tried so persistently to access the EFO is because they had been successful at a previous fiscal event. At this time, we do not have answers to all those questions, but the Treasury will make contact with previous Chancellors, to make them aware of developments relating to previous fiscal events. The OBR has rightly conducted its initial investigation as quickly as possible, and it is right that both the Government and the Treasury Committee now take time to consider the report and its findings. The Treasury Committee will have the opportunity to carefully question the OBR tomorrow, at its post-Budget hearing.

Furthermore, in response to paragraph 3.4 of the report, which set out that the problem exposed last week is not new, I can confirm to the House that the Government will work in conjunction with the National Cyber Security Centre to take forward the recommendation that a forensic examination of other fiscal events be carried out—although I note that the report finds no evidence of hostile cyber-activity. In addition, the report says that the OBR

“could not, in the time available, carry out a deeper forensic examination of other recent Economic and Fiscal Outlook events and we recommend that such an exercise is, with expert support, now urgently carried out”.

We will make sure that work is carried out urgently. We will look at wider questions of the systemic risk that this incident has uncovered, including the report’s conclusion that the OBR’s information security arrangements

“should have been regularly re-examined and assured by the management of the OBR.”

This Government are committed to the independence of the OBR and its role at the heart of economic and fiscal policy making. The Chancellor and the whole of the Treasury value the independence of the OBR and our constructive relationship with it over the past 16 months, in challenging economic times. The strength of that institution is a vital pillar in the Government’s economic and fiscal policy making, and we will respond to this matter with the seriousness it demands.

[Mr Speaker]

In the light of press reports on this matter, I remind the House of the rules and conventions relating to parliamentary language. As “Erskine May” sets out, unless a discussion is based on a substantive motion, certain personal criticisms, including accusations of lying or deliberately misleading the House, are not permitted. I know that the House will want to be at its best. We take this very seriously.

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[James Murray]

I was unclear from what the shadow Chancellor said at the beginning of his comments whether he, like us, values the role of the OBR in the Budget-setting process. We value its independence and we value its integrity. That is why we take what happened last Wednesday with the utmost seriousness, and we are determined to pursue it.

The shadow Chancellor went on to make a series of points, which I will address, but he fails to acknowledge that the productivity downgrade was real. The £16 billion hit to the forecast as a result of the productivity downgrade was real. I wonder why he does not want to acknowledge that. Could it be because the productivity downgrade was the result of things that his Government did over the 14 years that they were in office? Could it be the fact that the productivity downgrade was the result of a review by the OBR of policies including cuts to public investment, the mishandling of Brexit, and the record of the previous Government? That is perhaps why he does not want to acknowledge that point. The productivity downgrade by £16 billion was real. The need to build headroom was crucial. Both were principles that guided the Chancellor going into the Budget, as was the importance of cutting the cost of living, cutting NHS waiting lists, and cutting Government borrowing.

The shadow Chancellor will remember from when he was in government under the Conservatives that the process involving the OBR and the Treasury is an iterative one that runs until Budget day. When the Chancellor delivered her Budget, the “Economic and fiscal outlook”, which, as we have discussed, was published slightly early, set out the context for the decisions that she took. The shadow Chancellor raised the issue of information security. I am sure that he will have received the letter from the permanent secretary sent on 25 November, which stated:

“As Permanent Secretary, I place the utmost weight on Budget security. I will continue to keep all aspects under review to ensure the integrity of the Budget process.”

Finally, the shadow Chancellor asked where the Chancellor is today. I am very pleased to tell the House that the Chancellor has been at the Wales investment summit today, following the announcement yesterday of £1.4 billion of extra investment into Wales—just the latest in £16 billion of new investments announced since the summit was launched.

[Mr Speaker]

I call the Chair of the Treasury Committee.

[Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)]

Thank you, Mr Speaker—[Interruption.]

[Mr Speaker]

Order. Members have to learn that they cannot run in front of other Members when they are speaking, please. It looks really bad on TV, and it is not courteous.

[Dame Meg Hillier]

I, too, welcome the fact that the OBR has put its report out so quickly, so that it can put its house in order and make sure this never happens again. I have been saddened and troubled by the number of leaks, advertent and inadvertent, during the Budget process. Will the Chief Secretary please assure the House that there will be proper discussion in Government about how to prevent them? I need only point him to the words of the permanent secretary at the Treasury to the Treasury Committee on 12 February this year, when he was very clear that leaks can be market moving and must not happen. Let us be clear that the Debt Management Office was still trading during the Budget process, and was selling gilts at a higher price as a result.

[James Murray]

Mr Speaker, I can reassure my hon. Friend, you and the whole House that this Government take the Budget process and their responsibilities to this House very seriously. As I mentioned earlier, the permanent secretary has made it clear that the Treasury puts the utmost weight on Budget security. The permanent secretary made it clear in his letter to the shadow Chancellor that he will continue to keep all aspects under review to ensure the integrity of the Budget process.

[Mr Speaker]

I call the Liberal Democrat spokesperson.

[Daisy Cooper (St Albans) (LD)]

I understand that the Minister says he does not have all the answers to the questions about the incredibly serious security failings at the OBR, but has he requested or received any advice on whether the attempts to access the information might have reached a criminal threshold under the Criminal Justice Act 2003 or a civil level under market abuse regulations? Are there any other arm’s length bodies, related either to the Minister’s Department or to other Departments, that might now need to conduct a similar internal review into their security?

The Budget process has been a mess. There have been leaks on a level that has never been seen before and huge amounts of flip-flopping, which has created uncertainty for households and the markets and has led to businesses putting investment on hold. During the pre-Budget press conference, the Chancellor talked about a reduction in productivity growth, but failed to mention that tax receipts were higher than expected. Why did the Government omit to communicate that information?

Following Sweden’s budget crisis in the early ’90s, its Government changed to a system where the Swedish Parliament saw a draft budget and debated it at length, and Opposition parties could propose alternatives and amendments. Have the Government given any consideration at all to introducing a better system?

On the issue of omissions, on a number of occasions over the past year Ministers have repeated the claim that they would introduce permanently lower business rates for businesses in this country, but they omitted to say that business rates bills would go up because of the higher valuations. Pubs are now saying that their average increase will be £12,000 a year, or 76% over the next three years. Why did the Government omit to mention that?

[Luke Murphy (Basingstoke) (Lab)]

Having spent the past 18 months arguing that this Government have mismanaged the public finances, the Conservatives have now come to the House to argue that the public finances are fine after all. Their position is patently absurd. Due to the OBR’s productivity downgrade, which was a direct result of the Conservative Government’s decisions, the headroom available to the Government had been cut by 57%. Does the Minister agree that the Conservatives are right to be angry about the state of the public finances, but that they are on the Opposition Benches because they are responsible for it? The Chancellor is on our Benches, making decisions in the national interest.

[Mr Speaker]

Mr Murphy, I brought you in to ask a short question, not to give a full-blown statement. Please do not test the Chair too often.

[James Murray]

I thank my hon. Friend for his intervention. He is right to draw attention to the fact that the Conservatives want to completely distance themselves from their record in government. We have seen their record in government laid bare in the OBR’s productivity downgrade. That investigation by the OBR resulted in a hit to the public finances to the tune of £16 billion. That was a real consequence for our economy, and we had to take real decisions to correct it.

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[Stephen Flynn (Aberdeen South) (SNP)]

Two weeks ago, from the Dispatch Box, the Minister said with a straight face to me that he would not take lessons on credibility. I understand the error of my ways now; I should have given those lessons to the Chancellor, because since then we have seen that she has not been entirely truthful with the public—as one of my constituents said to me today while I was travelling down from Aberdeen, she lied to the public. While she was doing that, my constituents were fearing for their jobs through the Government’s punitive energy profits levy. Some 100 more jobs are being lost at Harbour Energy as a result of the Minister’s policies. Why is it okay for them to lose their jobs, yet she keeps hers?

[Mr Speaker]

I think the right hon. Gentleman means the Chancellor.

[James Murray]

The right hon. Gentleman talks about the energy profits levy. Let me be clear: we know that oil and gas have a role to play in our energy mix for many years to come. We want to support that industry while we make the transition to clean power, and that is the role that the energy profits levy will play. We set out at the Budget how the energy profits levy will come to an end in 2030, or sooner if the price floor is triggered.

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[James Murray]

Borrowing falls in every year of this forecast.

[Mr Speaker]

I call Chris Vince.

[Chris Vince (Harlow) (Lab/Co-op)]

Thank you, Mr Speaker. I am shocked to be picked so early, but I appreciate it.

I thank my right hon. Friend for his statement. The premature publishing of the OBR report is very disappointing; I think Members across the House can agree on that. It is particularly disappointing for me and for residents in Harlow, because it detracts from a Budget that makes a real difference to families in my constituency by freezing rail fares, freezing prescription charges, lowering waiting times for the NHS and—as the House knows, an area I am particularly concerned about—tackling tax evasion.