4 hours agoShareSaveChris MasonPolitical editorShareSaveGetty ImagesYou may have seen the blizzard of headlines over the weekend, in which the Chancellor, Rachel Reeves, was variously accused of lying and misleading you before her Budget last week.It is my job, after a careful examination of the facts, to call it, on your behalf, in careful, precise language. And in my judgement, on one specific element of what the chancellor and the Treasury told us before the Budget, we were misled.Let’s walk through this, step by step. On Tuesday 4 November, the chancellor called an extraordinary pre-Budget news conference. This was novel and voluntary – such a thing had never happened before.Reeves called that news conference because she wanted to prepare the ground for a big Budget full of difficult choices.And let’s be clear: much of what we heard from the chancellor in her breakfast speech that morning almost four weeks ago reasonably laid the ground for what was to come.She made it clear that big tax rises were coming, and she was right. She talked about the importance to her of measures to try to address the cost of living, and they were there in her Budget last week. She expressed a desire for more wriggle room in the spreadsheets against her self-imposed fiscal rules – so-called “headroom”. She delivered on that too, as she did on maintaining long term, investment spending.Crucially, she also talked about productivity, a measure of the output of the economy per hour worked. The forecaster and watchdog, the Office for Budget Responsibility, was expected to revise down its estimate for productivity growth. This decision by the OBR had big implications for Reeves – impacting the numbers, spreadsheets and therefore the calculations and trade offs she would have to make. In isolation, that made things harder for her, without question.In other words, nothing she said in that news conference was wrong.But – and this is the key point – we now know she knew something then she didn’t share with us that morning – and that is that tax receipts were much better than expected and more than offset the reduction in productivity growth.The OBR has since made that very clear and set out the timetable of when it told the Treasury what – including that the chancellor knew about the tax receipts data at the time of the news conference.In fact, 10 days later the Treasury did choose to volunteer this fact about tax receipts, when the Financial Times reported that income tax rates wouldn’t change in the Budget after all, and the markets then wondered how on earth the numbers would add up. What followed was briefing, to me and others, which was accurate and was intended to be reassuring to those markets – and which amounted to saying tax receipts are much stronger than we expected, so it’s OK.So, in that news conference a month ago, the chancellor volunteered to share some of the information she was privy to, but chose not to share some other information she was also privy to – only to then choose to share the thrust of it when she judged it to be politically expedient 10 days later.I should say the Treasury maintains that it is unfair to say she was misleading because at the time of the news conference the chancellor confronted a huge hole in her spreadsheets given the buffer or headroom she wanted to build up and the policy choices she wanted to make.The numbers do back this up. And the OBR could say the chancellor was right to be conservative and cautious, or that she should have based her plans on early versions of the watchdog’s forecast – because that would be the right thing to do. OBR boss Richard Hughes will be answering questions from M …
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[mwai_chat context=”Let’s have a discussion about this article:nn4 hours agoShareSaveChris MasonPolitical editorShareSaveGetty ImagesYou may have seen the blizzard of headlines over the weekend, in which the Chancellor, Rachel Reeves, was variously accused of lying and misleading you before her Budget last week.It is my job, after a careful examination of the facts, to call it, on your behalf, in careful, precise language. And in my judgement, on one specific element of what the chancellor and the Treasury told us before the Budget, we were misled.Let’s walk through this, step by step. On Tuesday 4 November, the chancellor called an extraordinary pre-Budget news conference. This was novel and voluntary – such a thing had never happened before.Reeves called that news conference because she wanted to prepare the ground for a big Budget full of difficult choices.And let’s be clear: much of what we heard from the chancellor in her breakfast speech that morning almost four weeks ago reasonably laid the ground for what was to come.She made it clear that big tax rises were coming, and she was right. She talked about the importance to her of measures to try to address the cost of living, and they were there in her Budget last week. She expressed a desire for more wriggle room in the spreadsheets against her self-imposed fiscal rules – so-called “headroom”. She delivered on that too, as she did on maintaining long term, investment spending.Crucially, she also talked about productivity, a measure of the output of the economy per hour worked. The forecaster and watchdog, the Office for Budget Responsibility, was expected to revise down its estimate for productivity growth. This decision by the OBR had big implications for Reeves – impacting the numbers, spreadsheets and therefore the calculations and trade offs she would have to make. In isolation, that made things harder for her, without question.In other words, nothing she said in that news conference was wrong.But – and this is the key point – we now know she knew something then she didn’t share with us that morning – and that is that tax receipts were much better than expected and more than offset the reduction in productivity growth.The OBR has since made that very clear and set out the timetable of when it told the Treasury what – including that the chancellor knew about the tax receipts data at the time of the news conference.In fact, 10 days later the Treasury did choose to volunteer this fact about tax receipts, when the Financial Times reported that income tax rates wouldn’t change in the Budget after all, and the markets then wondered how on earth the numbers would add up. What followed was briefing, to me and others, which was accurate and was intended to be reassuring to those markets – and which amounted to saying tax receipts are much stronger than we expected, so it’s OK.So, in that news conference a month ago, the chancellor volunteered to share some of the information she was privy to, but chose not to share some other information she was also privy to – only to then choose to share the thrust of it when she judged it to be politically expedient 10 days later.I should say the Treasury maintains that it is unfair to say she was misleading because at the time of the news conference the chancellor confronted a huge hole in her spreadsheets given the buffer or headroom she wanted to build up and the policy choices she wanted to make.The numbers do back this up. And the OBR could say the chancellor was right to be conservative and cautious, or that she should have based her plans on early versions of the watchdog’s forecast – because that would be the right thing to do. OBR boss Richard Hughes will be answering questions from M …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
