Government denies misleading public in run-up to Budgetpublished at 10:23 GMT
10:23 GMT
Earlier this week, the prime minister publicly backed Chancellor Rachel Reeves, saying he is proud
of the Budget and denying that the chancellor misled the public on the state of the nation’s finances in the build-up.
The Conservatives have accused Reeves of painting an overly
pessimistic picture as a “smokescreen” to raise taxes. Tory leader Kemi Badenoch claimed she “lied to the public”.
In the run-up to her Budget, Reeves gave strong indications the government was planning to increase income tax rates – a move which would have broken a key manifesto promise made by Labour during last year’s general election campaign.
In a press conference on 4 November, she pointed to
forecasts for economic productivity being weaker than expected, and warned
this had “consequences for the public finances too, in lower tax receipts”.
The comments were widely interpreted as laying the ground for tax rises.
The Office for Budget Responsibility has since said it had told the Treasury before the chancellor’s news conference that the downgrade to productivity was offset by higher wages, which increase the government’s tax revenues.
Ultimately, the Budget included £26bn of tax rises, with £8bn raised by extending the freeze on income tax and National Insurance thresholds for a further three years, but no increase in the rates of income tax.