Auto Amazon Links: No products found. Blocked by captcha.
Over the past weekend, widespread headlines emerged accusing Chancellor Rachel Reeves of deception in the lead-up to last week’s Budget. As the political editor, I have reviewed the situation carefully and must provide a clear assessment of the accuracy of those claims. After thorough consideration, I conclude that the Treasury and the chancellor did mislead the public on one particular point before the Budget was presented.
To understand this fully, we need to revisit the events of Tuesday, 4 November, when Reeves held an extraordinary pre-Budget news conference—a rarity in itself, as such a briefing had never been done before voluntarily. The intention behind this unusual move was to set expectations for a Budget that included tough fiscal decisions. Much of what she shared during that briefing was accurate: she warned of significant tax increases, emphasized her focus on addressing the cost-of-living crisis, and spoke about her desire for more flexibility within her fiscal rules, known as “headroom.” She also maintained a commitment to long-term investment spending. Importantly, she spoke at length about productivity, anticipating that the Office for Budget Responsibility (OBR) would revise its productivity growth forecasts downward, which would complicate her budget planning.
None of the statements made at that news conference were false. However, it has since become clear that the chancellor was withholding an important detail: at the same time as struggling with lower productivity growth projections, she also had access to data showing that tax revenues were far stronger than expected. This positive development effectively offset the negative impact of reduced productivity. The OBR has confirmed the timeline, detailing precisely when this information was shared with the Treasury, indicating that Reeves was aware of the robust tax receipts before the November news conference.
Ten days following the briefing, the Treasury voluntarily disclosed this more optimistic revenue picture after it was reported in the Financial Times, which suggested that income tax rates might remain unchanged after all. This announcement raised questions among markets about how the Budget numbers balanced out. Subsequent briefings, including those given to myself and other journalists, were both accurate and designed to reassure financial markets that the stronger tax receipts justified the Budgetary decisions. While the Treasury argues it was unfair to accuse the chancellor of misleading the public—stressing the daunting fiscal challenges she faced and her caution in managing the budget buffer—the facts show that some crucial information was selectively shared only when politically advantageous. The OBR’s chief, Richard Hughes, is scheduled to be questioned on these matters by the Treasury Committee soon, and this episode leaves lasting questions about how transparent the government was during this critical budgetary process
Read the full article from The BBC here: Read More
Auto Amazon Links: No products found. Blocked by captcha.