OBR chair Richard Hughes resigns over Budget day publishing error

The head of the Office for Budget Responsibility (OBR) has resigned following a Budget day mistake that led to the early release of a key document.

Richard Hughes said in his speech: resignation letter He took “full responsibility” for the problems identified in the OBR’s investigation.

This investigation found that the premature publication of the OBR’s forecasts was the worst failure in the organisation’s 15-year history.

Sir Keir Starmer defended the chancellor against claims he was misleading the public after the OBR published a letter on Friday revealing it had advised the Treasury that higher wages would help meet the government’s fiscal rules.

The OBR assesses the health of the UK economy. It is independent of the government but works closely with the Treasury.

The OBR’s first broadcast effectively confirmed a raft of new measures, including a three-year freeze on income tax and National Insurance thresholds, before the chancellor announced them, throwing his Budget into chaos.

on monday report the accident He concluded that it “caused grave damage to the OBR’s reputation” and “seriously offended” the chancellor, but added that it was unintentional.

The report said the OBR leadership had “ultimate responsibility” for the conditions which meant people had early access to the report.

In a letter to both the chancellor and Treasury Select Committee chair Dame Meg Hillier, Mr Hughes said he believed the OBR could “quickly regain and re-establish the trust and respect” it had gained by implementing the report’s recommendations.

“But I must also do my part to ensure that the organization I have loved leading for the past five years recovers quickly from this sad event,” he continued.

“I have therefore decided that it is in the OBR’s interests to resign as Chairman and take full responsibility for the shortcomings identified in the report.”

Mr Hughes was due to face questions from the Treasury Select Committee on the Budget and the OBR’s economic forecasts on Tuesday, but Dame Meg confirmed she would no longer attend.

Responding to his resignation, Chancellor Rachel Reeves said: “I would like to thank Richard Hughes for his public service and leadership of the Office for Budget Responsibility over the last five years and his many years of public service.”

Previously, Sir Keir Starmer denied the chancellor had misled the public about the country’s finances ahead of last week’s budget.

Reeves had given strong indications ahead of the Budget that he planned to increase income tax rates and pointed to gloomy forecasts for economic productivity.

But on Friday the OBR revealed it had previously told the Treasury that the fall in productivity would be offset by higher incomes, which would increase the government’s tax revenues.

Asked on Monday Whether Reeves was misleadingSir Keir said the government had made a number of commitments, including reducing borrowing, which meant the government “will always have to raise revenue”.

Conservative Party leader Kemi Badenoch noted: “Someone has resigned as a result of the budget chaos… but it is not Rachel Reeves.

“The Chancellor is trying to use his OBR seat as a human shield. But I won’t allow it. Why is Starmer and Reeves’ fault always someone else’s fault?”

Paul Johnson, former director of the Institute for Fiscal Studies and principal of Queen’s College, Oxford, said he was not surprised by Mr Hughes’ resignation.

“It was a really bad mistake,” he told BBC News, but added that Mr Hughes was a “very effective and very solid” chairman of the OBR.

“I think this is a shame for Richard Hughes and a shame for the OBR.”

Mr Hughes had just begun his second five-year term as chairman of the OBR after being re-nominated by the chancellor in May. He first started the business in October 2020, during the Covid pandemic.

Before that, he served as director of fiscal policy at the Treasury and previously served as section chief of the International Monetary Fund’s fiscal office for eight years.

The OBR appointed Ciaran Martin, the former director general of the National Cyber ​​Security Centre, to lead the investigation into how the OBR’s forecasts were accessed prematurely.

However, the OBR concluded there was no reason to suspect that foreign actors or cybercriminals were involved or that “anyone working for the OBR connived”.

In his research, Professor Martin found:

• OBR analysis was available on a hidden URL between 11.30am and 12.08am on Budget morning
• Accessed 43 times from 32 different devices
• An attempt was made to access the URL as early as 05:16
• This was a pre-existing weakness in the OBR broadcast system; While Reeves was presenting his Spring Statement, someone had gained early access to his March forecasts.
• The first publication was about the software OBR chose to publish on its website; this was more suitable for a small or medium-sized company than a major release of critical market-sensitive data.

Although OBR staff thought they had security measures in place to prevent premature publication, there were two bugs in the WordPress publishing platform that effectively bypassed these checks.

One of these was related to a plugin (optional extra) that OBR installed; this add-on had the unintended effect of eliminating the need to log in to access documents intended for future publication.

Second, the directory where the file was placed before publication allowed anyone to download the file directly.

To help with its autonomy, the OBR received an exemption from the requirement for independent authorities to use a more secure government broadcasting platform in 2013. In other areas of IT security, such as secure email, the OBR has adopted secure Treasury systems.

A Treasury spokesman thanked the OBR for its report and said a minister would respond “in due course”.