Chancellor Rachel Reeves has been confronted with a statement on the budget last year.
Rachel Reeves being grilled on Sky News by Sir Trevor Phillips (Image: Sky News)
Rachel Reeves has been slammed for a statement last year where she insisted “we don’t need to come back for more” taxes.
The Chancellor appeared on Sky News on Sunday morning, where she was grilled by Sir Trevor Phillips over her £26 billion tax-raising budget.
The presenter opened the show by replaying a statement Ms Reeves made last year, where she said: “We don’t need to come back for more. We’ve done that now.”
Sir Trevor hit back at her by saying, “that wasn’t true”.
But Ms Reeves said: “We’ve wiped the slate clean. Look, I’m not going to be able to write five years’ worth of budgets on this show today, but what we have done…but there’s no need to come back with another budget like this. We’ll never need to do that again.”
She is under increasing pressure over the way she has presented her budget and the tax rises that were contained within it.
This has led to accusations she lied to the country.
Asked by Sir Trevor if this is the case, the chancellor initially did not address the question and instead started talking about child poverty.
Pushed by Trevor, Reeves said “of course I didn’t” lie.
It comes amid a growing row over pre-Budget speculation that she faced as much as a £20 billion gap in meeting her fiscal rules, partly as a result of a downgrade in productivity forecasts.
Those rumours were fuelled by Ms Reeves when she used a speech on November 4 to suggest tax rises were needed because poor productivity growth would have “consequences for the public finances”.
But the Office for Budget Responsibility (OBR) on Friday said it had informed the Chancellor as early as September 17 that an improved tax take from growing wages and inflation meant the shortfall was likely smaller than initially expected, and told her in October it had been eliminated altogether.
The OBR’s disclosure has prompted opposition figures to urge the Financial Conduct Authority (FCA) to investigate whether the Treasury deceived the public.
Downing Street rallied around Ms Reeves, with a source saying: “No 10 was aware of the content of the speech, which we believe entirely accurately outlined the need to raise revenues.
“The idea that there was any misleading going on about the need to raise significant revenue as a result of the OBR figures, including the productivity downgrade they contained, is categorically untrue.”
The source also said No 10 was aware of the OBR figures “which showed the need for significant revenue-raising to meet our commitments and to achieve the desired headroom.
