Reeves disputes that she misled the public about the UK's finances before to the Budget
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Reeves disputes that she misled the public about the UK's finances before to the Budget
Claims that Chancellor Rachel Reeves deceived the public about the country's finances before to her budget have been refuted.
Reeves was questioned on the BBC about why, prior to Wednesday's Budget, she had frequently cautioned about a reduction to the UK's economic productivity predictions, notably in a speech on November 4.
Reeves neglected to disclose a forecast of increased pay when the Office for Budget Responsibility (OBR) informed her in mid-September that the public finances were in better shape than generally believed.
According to Reeves, the OBR data made it evident that there had been "less fiscal space than there was" and that she had made "upfront" decisions. However, Kemi Badenoch, the head of the Conservative Party, reiterated her demand that the chancellor resign.
Reeves stated she did not "accept" that she had been deceptive when questioned about the matter on Sunday with Laura Kuenssberg on BBC One.
However, Badenoch, who also appeared on the show, expressed dissatisfaction with the chancellor's denial.
As a "smokescreen" to increase taxes, the Conservatives have accused the chancellor of presenting an unduly negative picture of the public finances; Badenoch has accused Reeves of "lying to the public."
However, Downing Street has refuted the allegations, and Prime Minister Sir Keir Starmer is anticipated to support Reeves' budgetary choices in a speech on Monday, claiming that the chancellor's choices would alleviate pressure on living expenses and reduce inflation.
When Kuenssberg asked Reeves if she could be trusted, she said that she could.
Kuenssberg then summarised what the chancellor said in a speech on November 4th, when Reeves said there was less money than anticipated because of a decline in productivity and that she would probably have to raise taxes as a result.
Despite what some were suggesting, Reeves clarified that the OBR projections had been reduced from £9.9 billion in headroom in the spring to £4.2 billion in the autumn.
The money left over after the government satisfies its budgetary requirements under its own fiscal regulations is referred to as headroom, and it serves as a financial safety net for unforeseen expenses.
She stated, "I clearly could not deliver a budget with just £4.2bn of headroom," since that would have been "the lowest surplus any chancellor ever delivered" and she would have "rightly" been under fire for having too little headroom.
She stated: "I was clear that I wanted to build up that resilience and that is why I took those decisions to get that headroom up to £21.7bn."
Reeves responded that she had to take into account the policy decisions made in the preceding six months about welfare and the Winter Fuel Allowance when asked if she had overstated the circumstances in order to facilitate a £16 billion increase in welfare.
"I was very upfront about the fact that we would have to find that money in the Budget when those policies changed just before the summer," she stated.
"Yes, I did make the decision in the Budget to scrap the two-child [benefit] limit - that was funded by increases on online gambling taxes and also by cracking down on tax avoidance and tax evasion, fully costed and fully funded, and lifting half a million children out of poverty."
"Yes, I did make the decision in the Budget to scrap the two-child [benefit] limit - that was funded by increases on online gambling taxes and also by cracking down on tax avoidance and tax evasion, fully costed and fully funded, and lifting half a million children out of poverty."
Reeves responded, "I recognise I did not say that in the manifesto, but since then we've had both a significant downgrade in the productivity forecast but also huge global turbulence," when asked if freezing income tax thresholds violated the spirit, if not the letter, of her manifesto commitment on taxation.
"I have to respond to all those things because we would be punished if I lost control of the public finances," she continued.
"Punished by financial markets that hold £2.6tn of public debt, and punished with higher interest rates, which wouldn't affect just the country but would also affect every single business that borrows, and every single family that has a mortgage."
Reeves' reply, according to Badenoch, was "absolutely not" satisfactory, and she ought to have reduced welfare spending instead.
"The chancellor called an emergency press conference and told everyone how bad the financial situation was, and now we have seen that the OBR was telling her the complete opposite," she stated.
"She was raising taxes to pay for welfare - the only thing that was unfunded was the welfare payments that she has made, and she's doing it on the backs of a lot of people out there who are working very hard and getting poorer - and because of that I believe she should resign."
Badenoch also mentioned that Mel Stride, her shadow chancellor, has complained to the Financial Conduct Authority and requested an investigation.
She claimed that the chancellor was attempting "market manipulation" by attempting to "pitch-roll her budget - tell everyone how awful it would be and then they wouldn't be as upset when she finally announced it."
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