Charter for Budget Responsibility has been approved in the House of Commons, enshrining new fiscal rules into law.
Rules demonstrate the government's commitment to stability and investment to drive growth.
New fiscal rules confirmed as the Chancellor commits to going further and faster to kick start economic growth and make working people better off as part of the Plan for Change.
Today (Wednesday 29 January) the House of Commons voted to enshrine the Charter for Budget Responsibility and the new fiscal rules into law.
These fiscal rules provide the stability which underpins the Plan for Change and the Government's number one priority to kickstart economic growth.
There are two new non-negotiable fiscal rules. The first is the stability rule which ensures that day to day spending is matched by tax revenues, so the Government is only borrowing to invest.
The second is the investment rule which requires the government to reduce net financial debt as a share of the economy, keeping debt on a sustainable path while allowing much needed investment to grow the economy.
Chancellor of the Exchequer, Rachel Reeves said:
In our Plan for Change we were clear that our top priority is growth built on stability. Today I have announced how I will go further and faster on growth and our fiscal rules, which have been enshrined in law, are now non-negotiable and the bedrock of that stability.
Through the Charter, fiscal and economic stability will be enhanced by confirming the government's intention to move to one major fiscal event per year, giving families and businesses certainty of tax and spending plans.
Stability is also reinforced by confirmation that the Treasury will conduct Spending Reviews every two years, setting spending plans for at least three, to ensure public services have certainty on their funding.
Fiscal transparency and accountability will also be strengthened as the Chancellor has accepted all of the recommendations of the OBR's review of the March 2024 forecast for Departmental Expenditure Limits, including to improve the spending information that the Treasury shares with the OBR.
In addition, the Charter now requires the OBR to report on the long-term impacts of capital investment and other policies at fiscal events, showing how economic growth and the health of the public balance sheet is bolstered by good investment decisions.
The Charter also outlines the detail of the fiscal lock - the first legislation passed by this government - so that no government can announce fiscally-significant measures without being subject to an independent assessment by the OBR, ensuring they can never again be sidelined.
The legislation in full can be found on the Houses of Parliament website.
The approved OBR Charter can be found on GOV.UK.
