UK's Labour pledges to submit all budget plans to fiscal scrutiny

© Reuters. FILE PHOTO: Britain's Shadow Chancellor of the Exchequer Rachel Reeves appears on a screen during the Britain's Labour Party's annual conference in Liverpool, Britain, September 26, 2022. REUTERS/Henry Nicholls/file photo

LONDON (Reuters) - Britain's opposition Labour Party has promised to set in law a requirement that government tax-and-spending plans be reviewed by fiscal regulators, a year after former prime minister Liz Truss's uncosted "mini-budget" rocked financial markets.

"We will guarantee in law that any government making significant, permanent tax and spending changes will be subject to an independent forecast of its impact from the OBR (Office for Budget Responsibility)," Labour's would-be finance minister Rachel Reeves said.

"In the event of an emergency where budgetary changes must be introduced at speed and a forecast cannot be produced in time, the OBR would be allowed to set a date for when it can publish its forecast," Reeves wrote in the Financial Times.

Ahead of a national election expected in 2024, Labour is seeking to make the case that it would be a better guardian of the economy than the ruling Conservative Party.

Prime Minister Rishi Sunak replaced Truss shortly after the "mini-budget" crisis - which was heightened by her decision to skip an OBR review - and has sought to restore Britain's reputation for sound fiscal management. But his party lags Labour by a large margin in opinion polls.

Reeves also said Labour would commit to holding a single budget plan by the end of November each year which would give companies and families four months to plan for the new tax year which starts in April in Britain.

Former finance minister Philip Hammond announced a similar plan in 2017, saying he would ditch the traditional spring budget and move it to the autumn. But since then, big tax and spending announcements have been made in the spring.