Reeves denies authorising Budget leaks
Chancellor Rachel Reeves has rejected accusations that she authorised leaks of the Budget to media outlets in the run-up to her statement, which led to sharp turns in bond markets and worsening business confidence.
During Treasury Questions on Tuesday afternoon, Reeves was asked by her counterpart Mel Stride whether she authorised or allowed confidential details about the Budget to be passed onto journalists.
In response to the “yes or no” question, Reeves said: “No.”
Stride also used his question to urge the Financial Conduct Authority (FCA) to investigate leaks from government officials, pointing to one report in Bloomberg that claimed “improved forecasts” had allowed the Chancellor to drop plans to raise income tax rates.
The claim has since come under fire from the Office for Budget Responsibility (OBR) economist David Miles, who said such reports reflected a “misconception that there seemed to have been some good news”, adding he did not know “where that came from” as no such forecasts had improved.
Stride also took aim at Reeves’ comment in her early November forecast, quoting her comment “it is already clear that the productivity performance is weaker than previously thought”.
The Tory frontbencher said this public statement made by the Chancellor represented a “breach” of confidentiality agreements struck between the OBR and the Treasury before the Budget when the fiscal watchdog provides the government with independent forecasts.
Reeves responded: “In the Spring Statement the OBR was clear that productivity was coming in lower than forecast and they were clear they were reviewing that in the summer.
“The numbers that the OBR has since published showed that in the final pre-measures forecast the fiscal headroom was over £4bn. I was clear in my speech on the 4 November, I did not want to reduce the headroom, I wanted to increase it.
“I increased it to bring back the stability that is much needed in our economy after 14 years of Conservative government.”
Reeves to be grilled
The Treasury Questions session in the House of Commons comes a day before Reeves is set to be grilled by MPs in a hearing to scrutinise her Budget.
The Chancellor is expected to field questions on her handling of the process, with an inquiry underway in the Treasury to determine the source of media briefings during the ordeal since dubbed The Leaky War.
The FCA said it would not yet open an investigation into Budget leaks, though it asked the government to share details of its own inquiry with the regulator.
Reeves also spoke about a report by the Covid Counter Fraud Commissioner finding that schemes and contracts around the pandemic cost the taxpayer some £10.9bn, with most of the funds unlikely to be recovered.
The government has said it has already made back some £440m in support cash, with a response to the Covid counter fraud commissioner Tom Hayhoe’s review to come in the new year.
“We have started returning this money to the British people and we will leave no stone unturned in rooting out the fraudsters who profited from pandemic negligence,” Reeves said.