The Conservatives have accused Chancellor Rachel of undermining the budget process and dragging the Office of Budget Responsibility (OBR) into making economic forecasts after releasing plans to increase income tax.
The Shadow Chancellor Sir mell Stride wrote to Richard Hughes, chairman of the OBR, seeking clarification on when the arsonist received the watchdog’s prediction and whether it played any role in the U-Turnle treatment last week. Reeves was expected to announce an increase in the income tax base but was pushed back amid heavy speculation over Sir Keir Starmer’s leadership.
Reeves dropped the plans two weeks after the OBR delivered its pre-budget forecast on 31 October. Time has fueled suspicions that the Chancellor’s decisions are politically driven rather than defined by numbers. In his letter, Stride said the government’s explanations “are not limited,” adding that the chancellor has included the budget process “by getting detailed information and from”
Government sources said the Revens had worked on the Treasury’s updated financial analysis of the OBR’s long-term growth forecast received on 10 November, which was reported to have shown a $10 billion improvement in public finances. However, the published time period says that its last economic forecast is produced before any policy decisions – it was delivered on 31 October and should provide “stable” for the Chancellor’s choice.
Stride asked HUGHES to confirm whether the chancellor had received the forecasts that day, and whether any changes had been made to the direction since then from other than those from the Treasury to obtain points. He also questioned whether Reeves had breached confidentiality by publicly asserting that the OBR undermined the UK’s long-term vision.
Former Treasury Permanent Secretary Lord Chisa said it was a big mistake “of the chancellor to track the benefit of income tax and leave it, especially in response to the financial markets. Uk Gilt Revels came in after reports of a reversion, forcing ministers to assure investors that this decision was based on the OBR’s forecast rather than political predictions.
The Chancellor’s retreat from revenue increases now leaves a path to needing to raise as much as £25 billion through a patchwork of small incentives that meet his budget rules. Income tax hikes and higher duties on property, banks, gambling companies and electric vehicles are expected to be part of next week’s budget.
Treasury insiders say the late turnaround has left officials scrambling to finalize the numbers, with several steps still unexplained. One source suggested Reeves used to levy higher taxes on banks “when the sun was shining,” but is now facing pressure from Labor backbenchers to revive bank profits.
The political upheaval comes as new data from the British Retail Consortium pointed to a sharp fall in confidence in the crucial pre-Christmas season, following what is described as a budget.
The Treasurer said Reeves would put full details in the budget. The OBR declined to comment.
