Rishi Sunak reportedly delayed a major crackdown of Britain’s record high immigration numbers, due to fears it would hurt the economy.
Mr Sunak began considering a major reduction in the current influx as far back as the autumn, however plans failed to emerge until the beginning of December.
It has now been claimed Mr Sunak delayed announcing any reduction in numbers, which have broken records over the past two years, due to fears it would cause the Office for Budget Responsibility (OBR) to slash his headroom for tax cuts.
Any reduction in migration could have reduced projected economic performance, meaning Mr Sunak and the Chancellor would have had less ability to cut taxes or announce new spending projects.
A Tory source told the Sunday Telegraph: “The Prime Minister was concerned about the OBR reducing headroom as a result of taking further action [to reduce migration].”
In the end, Jeremy Hunt announced a major cut to National Insurance by 2p, and a swathe of other tax cuts for businesses and the self-employed.
The claims will once again ignite a row in the Tory Party about whether the OBR, who rarely have their forecasts proved right, have too much power and influence over Government.
Responding to today’s report, former Brexit Party MEP John Longworth said the move was a demonstration of “weak-mindedness” by the Government.
“This demonstrates not just the weak-mindedness of our leaders, but also the very grey area between technocrats measuring things and interfering in policy. Elected politicians should decide.”
Mr Sunak eventually pledged a crackdown on immigration, though not before official figures showed the influx reached a record high of 745,000 in the year to last December.
The changes include a significant hike in the earnings threshold migrants must meat before being considered for a visa – from £26,200 to £38,700.
The OBR was established in 2010 by George Osborne, after accusing the previous Labour government of fiddling their forecasts.
However many have also criticised the body for having too much influence over economic policy and public opinion.
Earlier this month, Tory MP Greg Smith used Prime Minister’s Questions to challenge Mr Sunak over the OBR’s credibility, and demanded a “better system of financial modelling so we can get taxes lower” instead of relying on the body’s “habitually wrong” forecasts.
The call came after the head of the OBR blamed Mr Sunak and Mr Hunt for inaccuracies in their forecasting.
Liz Truss, who was panned for failing to include an OBR forecast alongside her notorious ‘mini-budget’ in 2022, has gone on to set up a new economic analysis body, The Growth Commission, which she argues better understand the long-term effects of tax cuts.
Ms Truss and her allies have criticised the OBR for perpetuating the idea tax cuts are reckless whereas spending increases are inoffensive.
