Reeves rejects criticism from unnamed cabinet ministers that she wrongly withheld OBR forecasts from them
Rachel Reeves, the chancellor, has denied misleading cabinet colleagues about the state of the public finances ahead of the budget.
This morning the Times quoted an unnamed cabinet minster as saying “at no point were the cabinet told about the reality of the OBR forecasts”. (See 9.28am.) Beth Rigby from Sky News says she has heard the same from a cabinet minister.
I was also told by a cabinet minister this morning (as per @Steven_Swinford’s @matt_dathan) they feel misled over the framing of the public finances in the run up to the Budget
Speaking to BBC Wales at the Wales Investment Summit today, Reeves dismissed this claim. She said ministers would not expect to be told given all the information about the budget forecasts in advance.
You would never expect the prime minister and chancellor to go through all the detailed numbers.
The cabinet are briefed on the morning of the budget on the budget numbers.
Of course, we go through things that affect individual government departments, but the whole information of the budget is not supposed to be provided until the chancellor delivers the budget.
Obviously, this time, it was leaked early, but not by the Treasury.
Key events
Reeves ‘very clearly misled public’, John Swinney claims
John Swinney, Scotland’s first minister, has joined Reform UK in saying the PM’s ethics adviser should investigate pre-budget briefing by Rachel Reeves. He told journalists at an event in Edinburgh this morning:
Rachel Reeves very clearly misled the public.
She had information from the Office for Budget Responsibility (OBR) before she made her infamous Downing Street speech, in which she suggested the situation was much graver than it actually was.
Rachel Reeves has said she is absolutely confident that she will still be chancellor at the time of the next election.
At the Wales Investment Summit, asked by PA Media how confident she was about keeping her job until the election, she replied:
I’m absolutely confident.
I set out in a speech a couple of weeks before the budget that the ambition for the budget was to cut NHS waiting lists, cut the cost of living, and cut the debt and the deficit. We’ve achieved all of those things.
Photograph: Ben Birchall/PA
James Murry, chief secretary to Treasury, to make Commons statement about OBR forecasts at 3.30pm
James Murray, the chief secretary to the Treasury, will give a statement to MPs about the OBR forecasts. It will come at 3.30pm.
The opposition were planning to table an urgent question on the OBR information released on Friday (which has prompted the claims that Rachel Reeves misled the public about the need for tax rises), and it is likely that the Treasury agreed to schedule a statement knowing that, if they did not, the speaker would grant a UQ.
Reeves rejects criticism from unnamed cabinet ministers that she wrongly withheld OBR forecasts from them
Rachel Reeves, the chancellor, has denied misleading cabinet colleagues about the state of the public finances ahead of the budget.
This morning the Times quoted an unnamed cabinet minster as saying “at no point were the cabinet told about the reality of the OBR forecasts”. (See 9.28am.) Beth Rigby from Sky News says she has heard the same from a cabinet minister.
I was also told by a cabinet minister this morning (as per @Steven_Swinford’s @matt_dathan) they feel misled over the framing of the public finances in the run up to the Budget
Speaking to BBC Wales at the Wales Investment Summit today, Reeves dismissed this claim. She said ministers would not expect to be told given all the information about the budget forecasts in advance.
You would never expect the prime minister and chancellor to go through all the detailed numbers.
The cabinet are briefed on the morning of the budget on the budget numbers.
Of course, we go through things that affect individual government departments, but the whole information of the budget is not supposed to be provided until the chancellor delivers the budget.
Obviously, this time, it was leaked early, but not by the Treasury.
Starmer’s speech – snap verdict
For a while the only news happening on a Monday morning was the regular Reform UK press conference. There has been no sign of Nigel Farage this morning (although his party has announced the defection of a former Tory MP), but Keir Starmer and Kemi Badenoch have both been doing media events. Starmer is probably reasonably pleased with the way his went. There were four points that stood out.
1) Starmer pushed back fairly confidently against claims that Rachel Reeves misled the public about the state of the public finances ahead of the budget. During the Q&A he said:
There was no misleading, and I simply don’t accept, and I was receiving the numbers, that being told that the OBR productivity review means you’ve got £16bn less than you would otherwise have had shows that you’ve got an easy starting point.
Yes, of course, all the other figures have to be taken into account. But we started the process with significantly less than we would otherwise have had.
Starmer’s argument is unlikely to impress his media critics (see 9.53am), or Kemi Badenoch (see 10.29am). But it will hold up with more reasonable observers, and this was not one of those press conferences where the press pack is in full pursuit and the PM is on the run because there is a legitimate scandal that won’t go away. Reeves feels safe.
2) But Richard Hughes, chair of the Office for Budget Responsibility, looks a lot more vulnerable. Starmer claimed that he supported the OBR as an institution (see 11.14am), and this sounded sincere; the government passed a law last year beefing up the status of the OBR (to make a point about Liz Truss), and so he would say that. But he also publicly said the OBR should have carried out its productivity review at the end of the last parliament, and he refused to defend its decision to publish its pre-budget advice to the Treasury on Friday. He also talked up the significance of the pre-budget leak, even though in the end it had no practical impact. (See 11.14am.) This afternoon the OBR will publish its report on that affair. It is not impossible that Hughes could have to resign.
3) Starmer said the government would “keep moving towards a closer relationship with the EU”. (See 12.13pm.) In policy terms, this sounded like the most important passage of the speech. There is one very obvious policy that would bring the UK closer to the EU, and boost growth: joining the EU customs union (which is Lib Dem policy). Starmer did not propose this. But, a good article in the Observer yesterday, Rachel Sylvester said Starmer had his team did discuss this option as the budget was being prepared. She said:
The prime minister’s economic adviser (Minouche Shafik) also suggested that rejoining the EU customs union would be one of the most effective ways of generating growth.
Sylvester says this idea was “quickly knocked back”. But today Starmer is saying he wants to go further than what has already been agreed, and he said this would ultimately “require trade-offs”.
4) Starmer did sound a bit more shaky on welfare. He did make this a theme of his speech. But, in policy terms, his thinking on this sounded quite sketchy and, with the opposition making welfare spending one of their key attack lines, Starmer came across as someone who needs a better idea of what he wants to achieve, and how to defend it.
Starmer says UK has to ‘keep moving towards closer relationship with EU’
This is what Keir Starmer said about Brexit, and relations with the EU, at the end of his speech. (See 10.48am.)
Let me be crystal clear; there is no credible economic vision for Britain that does not position us as an open, trading economy.
So we must all now confront the reality that the Brexit deal we have significantly hurt our economy. And so, for economic renewal, we have to keep reducing frictions.
We have to keep moving towards a closer relationship with the EU, and we have to be grown up about that, to accept that this will require trade-offs.
That applies to our trading relations right across the world and, as you’ve seen already with this government, there are deals to be done if you’re committed to building relationships.
That’s what we’ve done with the US, it’s what we’ve done with India, and it’s what we’ve done with the EU, and we will keep going.
We will continue to reject drift, to confront reality and take control of our future.
The final two questions at the press conference went to “influencers” – Chris Chandler who does News with Chris on TikTok, and News ASB Andrew.
Q: (From Chandler) What reassurance can you give families struggling this winter?
Starmer said he would assure them the government is helping to keep bills down this winter. Rail fares and prescription charges are being frozen, and energy bills are being cut, he said.
Q: (From Andrew) Will you be transparent about the fiscal realities, even if the news is politically inconvenient?
Starmer said he had been explaining his decisions today. Hopefully that helped to explain the process, he said.
And that was the end of the press conference.
Starmer declines to say if he expects welfare spending to be falling by time of next election
Q: To return to the question Chris Mason asked (see 10.52am), do you want to see welfare spending falling by the time of the next election?
Starmer said he has two reviews looking at welfare spending. The last government “lost control of welfare spending”, he said.
He defended getting rid of the two-child benefit cap. And he said he was struck, visiting a hospital last week, how staff linked poor child health explicitly to poverty.
But he did not say whether or not he wanted overall welfare spending to be falling by the time of the next election.
(At the time of the proposed welfare reforms that had to be abandoned in the summer, ministers were not saying they would lead to spending on benefits falling by the time of the next election. But they did say the reforms would stop spending rising as much as it would without them.)
Q: Are you confidence Labour MPs will support welfare reform?
Starmer said that he saw this was a moral question. He repeated his point about being worried about young people being excluded for good from the workplace.
Starmer claims to be ‘supportive’ of OBR, but says it should have published productivity review at end of last parliament
Q: You are clearly very angry with the OBR over the timing of its productivity review. If it does not command your confidence, what is the point of the OBR?
Starmer denies being “angry”.
He says it is a good thing that reviews like this are carried out.
But he says it would have been better if that has been carried out at the end of the last parliament. He says he feels as if he has been “picking up the tab for the last government’s failure”.
He says he is “very supportive” of the OBR.
But he says the release of the budget document by mistake was “a massive discourtesy to parliament”.
UPDATE: Starmer said:
Well, I’m not angry at the productivity review.
It’s a good thing that reviews like that have done from time to time. I’m bemused.
Myself, I feel that doing at the end of last government and before we started might have been a good point to do a productivity review so we could know exactly what we were confronted with.
Doing it 15, 16, months into a government, it had to be done sometime, but picking up the tab for the last government’s failure – it’s been the nature of the beast, frankly, for the last 16 months, but it was given a special emphasis in that exercise.
I’m not angry, I’m just bemused as to why it wasn’t done at the end of the government rather than done now, but I’m not saying that these reviews aren’t important et cetera …
I’m not going to suggest that what happened last week, which was the entire budget being published before the Chancellor got to her feet, was not anything other than a serious error.
This was market sensitive information. It was a massive discourtesy to parliament. It’s a serious error, there’s an investigation that’s going on.
But as for the OBR itself, I’m very supportive of the OBR for the reasons I’ve set out – vital for stability, vital and integral to our fiscal rules, which I’ve said a number of times are ironclad.
Starmer declines to defend OBR’s decision to publish on Friday its pre-budget advice to Treasury
Q: Wasn’t it misleading for Reeves to talk about the productivity downgrade when she had been told she was heading for a budget surplus? And was it right for the OBR to reveal on Friday all its advice to the Treasury?
Starmer repeats his point about not accepting the Reeves was misleading.
And he says it is for Richard Hughes, the chair of the OBR, to explain why he published those figures.
Starmer questions why OBR chose to carry out productivity growth review when Labour came to power, not before
Q: (From Christopher Hope from GB News) How can our viewers trust anything that you say?
Starmer says the government started the budget process in a bad way. Having £16bn less than expected was “a very bad starting position”.
He queries why the OBR decided to review productivy growth when Labour came to power, when it had not done that earlier, but then suggests that is something he just has to accept.
