London Daily

Focus on the big picture.
Monday, Jan 05, 2026

Labour urges spending watchdog to assess impact of chancellor’s £21bn package

Labour urges spending watchdog to assess impact of chancellor’s £21bn package

Shadow Treasury secretary asks Office for Budget Responsibility to examine Rishi Sunak’s emergency cost of living measures
Labour has called for an independent assessment of whether Rishi Sunak’s £21bn cost of living emergency package could cause inflation to rise even higher and a verdict on the fiscal impact of substantial borrowing.

Pat McFadden, shadow chief secretary to the Treasury, wrote to the Office for Budget Responsibility (OBR) to ask it to analyse the impact of the measures.

He said that, although the sums were “of the order of magnitude that would normally be announced within a budget”, the UK’s tax and spend watchdog should “provide authoritative and independent economic and fiscal projections”.

Pressure on the government to do more to help those facing spiralling fuel and food bills ramped up substantially last week, when the energy regulator, Ofgem, admitted that the cap on household energy bills looked likely to rise by a further £800 in autumn.

In response – some have suggested partly as a ruse to shore up support in the aftermath of the Sue Gray report into Partygate – the chancellor unveiled handouts worth £21bn.

He also U-turned to support a windfall tax on offshore oil and gas companies’ profits – a move that senior government figures and Tory MPs had discredited for months when Labour initially called for it.

The move was well received by most Tory MPs, and McFadden himself said Labour “welcomes these announcements”. But because the announcement came in a fairly poorly attended Commons statement the day before recess, the OBR did not examine the measures as closely as it would other major economic statements.

“With at least £10bn of new borrowing announced yesterday, there should have been an accompanying report on the fiscal impact of the measures taken by the chancellor,” McFadden said. “It is right that families get the support they need, and also right that the country knows how the chancellor is paying for this.

“Labour’s fiscal rules would ensure that the OBR had oversight of any package we introduce in response to a crisis such as this, ensuring that we get the best value for the public purse, and this is why we have written to them to seek their assessment.”

McFadden’s letter to the OBR’s chair, Richard Hughes, called for an assessment of the measures on public sector expenditure, receipts and net borrowing, as well as gross domestic product and investment.

Sunak argued that the support was targeted and designed to help “those who are paying the highest price for the high inflation we face”.

After his announcement, the Brexit opportunities minister, Jacob Rees-Mogg, admitted he “sees the concerns” of Tory MPs worried about the inflationary impact of substantial government spending, but said it was a “very difficult balancing act”.

The OBR and Treasury have been contacted for comment.
Newsletter

Related Articles

0:00
0:00
Close
HSBC Leads 2026 Mortgage Rate Cuts as UK Lending Costs Ease
US Joint Chiefs Chairman Outlines How Operation Absolute Resolve Was Carried Out in Venezuela
Starmer Welcomes End of Maduro Era While Stressing International Law and UK Non-Involvement
Korean Beauty Turns Viral Skincare Into a Global Export Engine
UK Confirms Non-Involvement in U.S. Military Action Against Venezuela
UK Terror Watchdog Calls for Australian-Style Social Media Ban to Protect Teenagers
Iranian Protests Intensify as Another Revolutionary Guard Member Is Killed and Khamenei Blames the West
Delta Force Identified as Unit Behind U.S. Operation That Captured Venezuela’s President
Europe’s Luxury Sanctions Punish Russian Consumers While a Sanctions-Circumvention Industry Thrives
Berkshire’s Buffett-to-Abel Transition Tests Whether a One-Man Trust Model Can Survive as a System
Fraud in European Central Bank: Lagarde’s Hidden Pay Premium Exposes a Transparency Crisis at the European Central Bank
Trump Announces U.S. Large-Scale Strike on Venezuela, Declares President Maduro and Wife Captured
Tesla Loses EV Crown to China’s BYD After Annual Deliveries Decline in 2025
UK Manufacturing Growth Reaches 15-Month Peak as Output and Orders Improve in December
Beijing Threatened to Scrap UK–China Trade Talks After British Minister’s Taiwan Visit
Newly Released Files Reveal Tony Blair Pressured Officials Over Iraq Death Case Involving UK Soldiers
Top Stocks and Themes to Watch in 2026 as Markets Enter New Year with Fresh Momentum
No UK Curfew Ordered as Deepfake TikTok Falsely Attributes Decree to Prime Minister Starmer
Europe’s Largest Defence Groups Set to Return Nearly Five Billion Dollars to Shareholders in Twenty Twenty-Five
Abu Dhabi ‘Capital of Capital’: How Abu Dhabi Rose as a Sovereign Wealth Power
Diamonds Are Powering a New Quantum Revolution
Trump Threatens Strikes Against Iran if Nuclear Programme Is Restarted
Apple Escalates Legal Fight by Appealing £1.5 Billion UK Ruling Over App Store Fees
UK Debt Levels Sit Mid-Range Among Advanced Economies Despite Rising Pressures
UK Plans Royal Diplomacy with King Charles and Prince William to Reinvigorate Trade Talks with US
King Charles and Prince William Poised for Separate 2026 US Visits to Reinforce UK-US Trade and Diplomatic Ties
Apple Moves to Appeal UK Ruling Ordering £1.5 Billion in Customer Overcharge Damages
King Charles’s 2025 Christmas Message Tops UK Television Ratings on Christmas Day
The Battle Over the Internet Explodes: The United States Bars European Officials and Ignites a Diplomatic Crisis
Princesses Beatrice and Eugenie Join Royal Family at Sandringham Christmas Service
Fine Wine Investors Find Little Cheer in Third Year of Falls
UK Mortgage Rates Edge Lower as Bank of England Base Rate Cut Filters Through Lending Market
U.S. Supermarket Gives Customers Free Groceries for Christmas After Computer Glitch
Air India ‘Finds’ a Plane That Vanished 13 Years Ago
Caviar and Foie Gras? China Is Becoming a Luxury Food Powerhouse
Hong Kong Climbs to Second Globally in 2025 Tourism Rankings Behind Bangkok
From Sunniest Year on Record to Terror Plots and Sports Triumphs: The UK’s Defining Stories of 2025
Greta Thunberg Released on Bail After Arrest at London Pro-Palestinian Demonstration
Banksy Unveils New Winter Mural in London Amid Festive Season Excitement
UK Households Face Rising Financial Strain as Tax Increases Bite and Growth Loses Momentum
UK Government Approves Universal Studios Theme Park in Bedford Poised to Rival Disneyland Paris
UK Gambling Shares Slide as Traders Respond to Steep Tax Rises and Sector Uncertainty
Starmer and Trump Coordinate on Ukraine Peace Efforts in Latest Diplomatic Call
The Pilot Barricaded Himself in the Cockpit and Refused to Take Off: "We Are Not Leaving Until I Receive My Salary"
UK Fashion Label LK Bennett Pursues Accelerated Sale Amid Financial Struggles
U.S. Government Warns UK Over Free Speech in Pro-Life Campaigner Prosecution
Newly Released Files Shed Light on Jeffrey Epstein’s Extensive Links to the United Kingdom
Prince William and Prince George Volunteer Together at UK Homelessness Charity
UK Police Arrest Protesters Chanting ‘Globalise the Intifada’ as Authorities Recalibrate Free Speech Enforcement
Scambodia: The World Owes Thailand’s Military a Profound Debt of Gratitude
×