No 10 denies Reeves misled public in run up to Budget


Tory leader Kemi Badenoch said the letter showed Reeves had “lied to the public” and should be sacked.

The weeks leading up to the Budget were dominated by speculation the chancellor would increase the rates of income tax, breaking a Labour manifesto pledge.

On 4 November, Reeves used a rare pre-Budget speech in Downing Street to warn the UK’s productivity was weaker “than previously thought” and that “has consequences for the public finances too, in lower tax receipts.”

Then, on 10 November, she told BBC Radio 5 Live: “It would, of course be possible to stick with the manifesto commitments, but that would require things like deep cuts in capital spending.”

These comments, along with her speech, fuelled speculation she needed to raise significant sums to meet her fiscal rules.

However, the Office for Budget Responsibility has now confirmed that although it did indeed downgrade productivity, it also predicted this would be “offset” by higher wages increasing the government’s tax revenues.

That meant she had a surplus to meet both of her fiscal rules.

In a letter to the Commons Treasury select committee, external, OBR chairman Richard Hughes revealed that he told the chancellor on 17 September that the public finances were in better shape than widely thought.

The letter also reveals that on the 31 October the OBR told the Treasury it was on course to meet its main rule of not borrowing for day-to-day spending, albeit by £4.2bn, less than the £9.9bn in “headroom” she had left herself last year.


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