LONDON, Feb 18 (Reuters) - Britain's right-wing Reform UK party said it would revamp the Bank of England and the country's budget arbiter as it seeks to balance promises of change to voters with
Reform UK Proposes Changes to Bank of England and Budget Oversight
Reform UK's Economic Strategy
By Alistair Smout and William Schomberg
Independence of the Bank of England
LONDON, Feb 18 (Reuters) - Britain's right-wing Reform UK party said it would make changes to the way the Bank of England and the country's budget arbiter operate but would respect their independence, as it sought to reassure investors over its economic plans.
Changes to the Office for Budget Responsibility
Saying it backed the two institutions it has previously criticised, the party led by Brexit campaigner Nigel Farage called for more business figures to sit on the BoE's interest rate-setting committee.
Fiscal Rules and Tax Policies
Reform - currently leading the governing Labour Party in opinion polls - said it would also strip the BoE of the "distractions" of climate-change work to focus more on inflation.
JENRICK SAYS BOE MUST PERFORM BETTER
Robert Jenrick, named on Tuesday as Reform's would-be finance minister, reiterated the party's criticisms of the BoE's bond-buying and said it took "its eye off the ball" on inflation.
"Under Reform, the Bank of England will remain independent," he said in a speech in London's finance district on Wednesday. "But the bank must perform better."
The Office for Budget Responsibility - whose projections underpin the government's fiscal plans - would be joined by "super-forecasters" chosen via competitions for the most accurate modelling of the impact of finance ministry decisions.
Jenrick accused the OBR of underestimating the benefits of tax cuts and overestimating the economic boost from low-skilled migration.
Reform would prepare strict fiscal rules after consulting investors, he said, reiterating Farage's pledge not to cut taxes until borrowing had been reduced.
"We will only cut taxes when we have generated the fiscal headroom necessary to make tax cuts sustainable," Jenrick said, adding that 25 billion pounds ($34 billion) a year could be saved from spending on welfare, foreign aid and other areas.
Reform will have to tread carefully as it seeks to portray itself as a responsible steward of the economy before the next national election, due in 2029.
Former Conservative Prime Minister Liz Truss sidelined the OBR with her 2022 "mini-budget" that sent bond markets tumbling with its unfunded tax-cut plans. She also suggested reviewing the BoE's mandate.
Jenrick served as a junior minister in the short-lived Truss government. He said both the Conservatives and Labour were to blame for increases in welfare costs.
Reform would reinstate limits on welfare for families with more than two children, Jenrick - who called for the cap to be scrapped last year - said.
Only British nationals would be able to claim welfare benefits and Reform would tighten rules for disability benefits claimants, he added.
($1 = 0.7371 pounds)
(Reporting by William Schomberg and Alistair Smout. Editing by Gareth Jones and Mark Potter)
