Fiscal rules change by fiat: no due process, no buffer norms

The fiscal rules have been rewritten roughly nine times since 2010, each time by government announcement without consultation. The Lords Economic Affairs Committee's April 2026 report found the churn, plus wafer-thin headroom treated as a target, has made the framework frail and turned the OBR into a lightning rod. The IFS proposes replacing the pass-fail rule with a graded traffic-light assessment, and the Lords recommend codified larger buffers with rule changes made only after formal consultation outside election periods. The 2025 move to a single annual OBR assessment addressed a symptom. Nothing obliges any government to follow due process when moving the goalposts.

Credibility is the cheapest form of debt reduction, and elevated term premia partly price the risk that rules get redefined when they bind. Forecast noise around a £10bn headroom margin drives tax speculation cycles that damage investment and the quality of policymaking.

Amend the Charter for Budget Responsibility to require public consultation and independent review before rule changes, codify a minimum buffer norm, and adopt a graded compliance assessment. The package is drafted in outline and a policy unit could produce it this year.

// State-led: Instrument: Charter for Budget Responsibility amendment; a policy unit can draft the package, only government can enact due process.

Markets partly price debt on the risk rules move when they bind, the package is ready to draft, and no dated trigger forces it.