Britain's fiscal oversight has a blind spot

In his latest Project Syndicate article, Britain’s Fiscal Watchdog Doesn’t See What Matters (5 December 2025), London Business School’s Professor Paolo Surico argues that the Office for Budget Responsibility’s modelling assumptions are blinding policymakers to the long-term productivity gains generated by public and private innovation.

This article caps a year of Surico’s publications, talks and media commentary warning that the OBR’s five-year horizon systematically understates the UK’s potential output and fiscal headroom. Drawing on international evidence and his own research on the persistent returns to R&D investment, he shows how short-term modelling creates a misleading sense of fiscal constraint that deters growth-enhancing policy.

Throughout this year’s body of work, Surico has urged a modernisation of Britain’s fiscal framework, calling for regular expert reviews of the OBR’s methodology and clearer communication of uncertainty through longer-term projections, similar to the approach adopted by the US Congressional Budget Office. His argument is consistent and urgent: without institutions that fully account for the enduring impact of innovation, the UK risks treating growth as a slogan rather than a strategy. Real fiscal credibility, he concludes, requires the courage to invest in the ideas and research that drive long-term prosperity.