London Daily

Focus on the big picture.
Tuesday, Sep 01, 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
England Faces Renewed Scrutiny Over Sewage Discharges and Water Quality
Victoria Beckham Business Reports First Operating Profit Since Launch
BT Expects £2 Billion From Copper Sales During Full-Fibre Rollout
UK Train Drivers Secure 3.6% Pay Rise and Avert Strike Action
FCA Chief Faces Scrutiny Over Alleged Pressure on Consumer Group in Car Finance Case
Kemi Badenoch Names Andrew Griffith Shadow Chancellor in Conservative Reshuffle
UK House Prices Rise for First Time Since April
UK Shop-Price Inflation Accelerates to 1.5% in August
Met Office Data Point to Hottest UK Summer on Record
UK Announces Emergency Prison Release Measures and £110 Million Capacity Expansion
UK Launches Expanded Free School Meals and 1,400 Breakfast Clubs
Bank of England Governor Warns G20 of AI-Related Economic and Cyber Risks
Prime Minister Andy Burnham Calls for Greater Public Control of Water, Energy and Transport
UK Gains Full Access to £13 Trillion Trans-Pacific Trade Bloc
UK Long-Term Borrowing Costs Hit 28-Year High as Oil Shock Drives Global Bond Selloff
Royal Mail Keeps First-Class Stamps at £1.80 and Second-Class at 91p
Church of England Prepares Formal Apology Over Historical Forced Adoptions
UK Competition Regulator Caps Veterinary Prescription Fees at £21
UK Aviation Authorities Roll Out Airspace Changes to Reduce Flight Delays
England Makes School Allergy Policies Mandatory Under Benedict’s Law
England and Wales Tighten Child Safeguarding Checks by Removing Supervision Exemption
Cornwall Geothermal Plant Begins Commercial Power and Lithium Operations
UK Inflation Holds Near 2.9% as Energy Costs Remain a Risk
UK Productivity Growth Averages 1.1% Over Two Years, Resolution Foundation Says
England Introduces Nationwide School Smartphone Ban and Uniform Limits
UK Gives Border Officers New Powers to Seize Migrants’ Mobile Phones
Green Party Wins First Westminster By-Election in Gorton and Denton
UK and EU Advance Gibraltar Border Deal Allowing Spanish Guards to Conduct Arrival Checks
Robert Jenrick Joins Reform UK After Losing Conservative Whip
Andy Burnham Faces First Prime Minister’s Questions After Labour Cabinet Overhaul
ScottishPower Recycles Nearly All Materials From Historic Hagshaw Hill Wind Farm
Millions Travel Across England, Wales and Northern Ireland for Summer Bank Holiday
Met Office Issues Yellow Thunderstorm Warnings Across Southern England
Four Arrested After Bank Holiday Stabbing Violence in Kettering
Scottish Chamber of Commerce Warns Tax and Business Costs Risk Holding Back Scotland
UK Government Launches Youth Employment Drive With Major Retailers
UK and Ukraine Advance AI and Defence Technology Partnership
Prime Minister Andy Burnham Moves to Exclude Serious Offenders From Early Release
Twelve Arrested After A66 Crash Kills Seven, Including Two Police Officers
Bank of England Governor Warns AI Investment Boom Could Trigger Global Market Correction
London Science Museum Ends Long-Running BP Sponsorship
Scottish Homeowners Prepare Valuation Challenges Over Proposed Mansion Tax
UK Prosecutors Consider Charges Against Undercover Police in Spycops Scandal
James Cleverly Leaves Shadow Cabinet to Run for London Mayor
Avanti West Coast Drivers Agree 3.6% Pay Rise, Averting Strike Action
Allianz Explores £5 Billion Takeover of British Roadside Assistance Group AA
UK Government Retreats From Plan to Unfreeze Personal Income Tax Threshold
Northern Ireland Leaders Press UK Government for Sustainable Funding Settlement
UK Health Agency Warns Nationwide Salmonella Outbreak Could Worsen
NHS Warns Autism and ADHD Assessment Costs Have Become Unsustainable
×