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Chancellor of the Exchequer, Rishi Sunak, has reportedly delayed plans for a significant reduction in Britain’s immigration numbers due to apprehensions about potential adverse effects on the economy. The proposal, which had been under consideration since autumn, only came to light in early December, according to a report by Express.

Sources suggest that Sunak hesitated to announce immigration cuts, fearing that such measures might lead the Office for Budget Responsibility (OBR) to reduce his headroom for tax cuts. A decrease in migration could impact economic projections, constraining Sunak’s ability to implement tax reductions or introduce new spending initiatives.

The delay prompted former Foreign Secretary Jeremy Hunt to unveil a substantial cut to National Insurance by 2p, along with various tax reductions for businesses and the self-employed. These developments are expected to reignite tensions within the Conservative Party regarding the OBR’s influence on government decisions.

Critics argue that the OBR, despite its occasional inaccurate forecasts, holds too much sway over economic policy. Former Brexit Party MEP John Longworth characterized the delayed immigration crackdown as a demonstration of government “weak-mindedness,” emphasizing the importance of elected politicians making decisions over technocrats.

Despite the delay, Sunak eventually pledged to address immigration issues, responding to official figures indicating a record-high influx of 745,000 in the year ending December. The proposed changes include a significant increase in the earnings threshold for migrants, rising from £26,200 to £38,700.

The OBR, established in 2010, has faced criticism for its substantial influence on economic policy and public opinion. Tory MP Greg Smith recently challenged Sunak over the OBR’s credibility, calling for a “better system of financial modeling” to lower taxes rather than relying on the OBR’s “habitually wrong” forecasts.

The ongoing debate over the role and influence of the OBR in shaping economic policies is expected to persist within the Conservative Party. The establishment of a new economic analysis body, The Growth Commission, by Liz Truss aims to offer an alternative perspective on the long-term effects of tax cuts, challenging the OBR’s stance on fiscal responsibility.

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