Chancellor Rachel Reeves has condemned leaks ahead of her autumn Budget as “unacceptable”, telling MPs that much of the speculation was inaccurate. She also confirmed that the decision not to raise income tax was taken jointly with Prime Minister Keir Starmer.
Appearing before the Commons Treasury committee, Reeves said she wanted to reiterate in the strongest terms that leaks were damaging. The Financial Times had reported that plans for a manifesto-breaking income tax increase were dropped, triggering a bond market sell-off. Reeves insisted there had been no authorised briefing but said she and Starmer had prepared for a rise before other tax measures made it unnecessary.
The chancellor revealed she met Starmer two to three times a week before the Budget and that the final decision was made together as a team. She also addressed the resignation of Office for Budget Responsibility chair Richard Hughes, who left after documents were inadvertently released early. Reeves said a replacement was unlikely before the spring statement.
Reeves reserved the right to impose further tax rises or spending cuts if the public finances deteriorate, but downplayed the likelihood. She pointed to nearly £22bn of headroom against her fiscal rule and her decision to scrap an OBR verdict on whether the target is being met. However, she ruled out capital gains tax on primary residences and scrapping the pensions triple lock in this parliament.
To give markets confidence, Reeves said the government would introduce legislation as soon as possible to enact tax changes, including a new council tax surcharge on properties over £2m and a 3p-per-mile levy on electric vehicles. This follows concerns about the credibility of her revenue-raising plans.
