Trust in the Chancellor's Financial Plans

Chancellor Rachel Reeves is standing firm on her financial decisions, despite critics accusing her of misleading the public before the Budget. She insists she has been honest about her choices and can be trusted with the country's money.

Interview Revelations

In a recent interview, Reeves was questioned about her repeated warnings of a possible downgrade in the UK's economic productivity. It was revealed that the Office for Budget Responsibility (OBR) had informed her in September that the public finances were in better shape than anticipated.

Did she mislead the public?

Reeves denied any deception, stating she had been transparent about her plans and decisions.

Conservative Backlash

The Conservatives remain unconvinced. Their leader, Kemi Badenoch, called for Reeves' resignation, alleging that Reeves deliberately painted a bleaker picture of the public finances to justify tax increases.

"Reeves lied to the public and should step down."

Downing Street's Stance

Downing Street disagrees, asserting that Reeves did not mislead anyone. Prime Minister Keir Starmer is expected to support her Budget decisions in an upcoming speech, highlighting how her choices will help with the cost of living and lower inflation.

Financial Constraints

Reeves explained that she did not have extra funds to allocate. The OBR's figures had decreased from £9.9bn in spring to £4.2bn in autumn. She argued that delivering a Budget with just £4.2bn would have been unfeasible and criticized for its minimal surplus. To build resilience, she increased the headroom to £21.7bn.

Welfare Spending and Policy Choices

When asked if she exaggerated the situation to raise welfare spending, Reeves mentioned considering policy choices made in the previous six months. She was upfront about needing to fund these policies in the Budget. She also discussed scrapping the two-child benefit limit, funded by increases in online gambling taxes and cracking down on tax avoidance and evasion. This decision lifted half a million children out of poverty.

Income Tax Thresholds and Global Turbulence

Reeves admitted she did not mention freezing income tax thresholds in the manifesto. However, she cited a significant downgrade in the productivity forecast and global turbulence as reasons for her decisions. She emphasized the need to respond to these changes to maintain control of the public finances, warning that failure to do so could lead to higher interest rates and financial market penalties affecting every business and family with a mortgage.

Conservative Dissatisfaction

Kemi Badenoch remained unsatisfied with Reeves' explanation. She suggested that Reeves should have cut welfare spending instead. Badenoch urged Reeves to resign, accusing her of raising taxes to pay for welfare, which she claimed hurt hardworking people. Badenoch also mentioned that her shadow chancellor had written a letter to the Financial Conduct Authority, requesting an investigation into Reeves' actions.