Asked by: Adrian Ramsay (Green Party - Waveney Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will make an assessment of the potential implications for her Department's policies of the New Economics Foundation report entitled Forecasting a better future: the case for a bucket approach to fiscal multipliers and more, published on 31 January 2025.
Answered by Emma Reynolds - Economic Secretary (HM Treasury)
The independent Office for Budget Responsibility (OBR) is responsible for preparing forecasts for the UK economy. This includes an assessment of the impact of Government policies, where the OBR regularly review and publish papers on their approach.
The Chancellor and OBR Budget Responsibility Committee speak regularly, and there is an ongoing dialogue at official level on a range of issues. This includes the OBR’s approach to preparing forecasts for the UK economy.
The OBR assesses the demand side impacts of policy using multipliers – these estimate the impact on real GDP from government policy. The OBR’s multiplier framework is described in Dynamic scoring of policy measures in OBR forecasts.
The OBR also take account of how specific policies affect the supply side of the economy. This approach is set out in Forecasting potential output - the supply side of the economy.
The OBR have also recently published a new framework for assessing public investment which can be found in the OBR’s Discussion Paper No. 5: Public investment and potential output. This framework was used in the Autumn Budget 2024, where the OBR judged the increase in departmental capital spending to raise potential output by 1.1 percent by 2073-74.
The next OBR forecast will be published on Wednesday 26th March 2025.
Asked by: Adrian Ramsay (Green Party - Waveney Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the OBR fiscal multipliers table in the document entitled Dynamic scoring of policy measures in OBR forecasts, published by the Office for Budget Responsibility, published on 9 November 2023, what discussions she has had with the Office for Budget Responsibility on the basis for its assumption that most government spending never has a multiplier effect above 1.
Answered by Emma Reynolds - Economic Secretary (HM Treasury)
The independent Office for Budget Responsibility (OBR) is responsible for preparing forecasts for the UK economy. This includes an assessment of the impact of Government policies, where the OBR regularly review and publish papers on their approach.
The Chancellor and OBR Budget Responsibility Committee speak regularly, and there is an ongoing dialogue at official level on a range of issues. This includes the OBR’s approach to preparing forecasts for the UK economy.
The OBR assesses the demand side impacts of policy using multipliers – these estimate the impact on real GDP from government policy. The OBR’s multiplier framework is described in Dynamic scoring of policy measures in OBR forecasts.
The OBR also take account of how specific policies affect the supply side of the economy. This approach is set out in Forecasting potential output - the supply side of the economy.
The OBR have also recently published a new framework for assessing public investment which can be found in the OBR’s Discussion Paper No. 5: Public investment and potential output. This framework was used in the Autumn Budget 2024, where the OBR judged the increase in departmental capital spending to raise potential output by 1.1 percent by 2073-74.
The next OBR forecast will be published on Wednesday 26th March 2025.
Asked by: Adrian Ramsay (Green Party - Waveney Valley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if she will include section 17(5) of the Environment Act 2021 in the Green Book.
Answered by Darren Jones - Chief Secretary to the Treasury
Ministers of the Crown have a legal duty to have due regard to the environmental principles policy statement when making policy, in line with section 19 of the Environment Act 2021.
This is made clear on the Green Book webpage and will be reflected in the Green Book when the document is next updated.