Scotland's First Minister has launched a stinging attack on the Chancellor, accusing her of deliberately misleading the British public about the state of the nation's finances in the lead-up to last week's Budget.
Allegations of Misleading the Public
John Swinney stated that Rachel Reeves had "very clearly" misled voters by portraying the UK's fiscal situation as far worse than it actually was. The First Minister made these remarks on Monday, 1st December 2025, while attending a ground-breaking ceremony for Edinburgh's new Dunard Centre concert hall.
Swinney pointed to an Office for Budget Responsibility (OBR) forecast, which he claimed the Chancellor had received prior to her now-infamous Downing Street speech. This forecast reportedly showed a £4.2 billion surplus against Ms Reeves' own borrowing rules. "She had information from the OBR before she made her speech," Swinney told journalists, "in which she suggested the situation was much graver than it actually was."
Government Defence and the 'Funding Gap'
In response, Labour ministers have vehemently denied any suggestion of misleading conduct. Chief Secretary to the Prime Minister, Darren Jones, countered that the government had inherited a significant "funding gap" which urgently needed to be addressed.
The UK Government has defended the Chancellor's position, arguing that the OBR's positive forecast did not account for several key policy decisions. These include the recent U-turn on welfare reform and the planned abolition of the controversial two-child benefit cap. A government spokesperson insisted these commitments altered the fiscal landscape.
Implications for Scotland and Calls for Ethics Probe
The political row comes as the Scottish Government prepares its own Budget, due to be revealed in January. Mr Swinney confirmed his administration is currently analysing the implications of the UK-wide spending plans.
He went so far as to suggest the Chancellor's position was now "untenable" and called for the matter to be referred to the Government's independent ethics adviser. The First Minister was also questioned on how the Scottish Government would now allocate funding previously earmarked to mitigate the two-child cap, given its planned abolition by Westminster.
"We've not come to decisions on that yet," Swinney admitted, highlighting the need for a careful judgment on the level of the Scottish Child Payment, a key tool in tackling child poverty.
Labour's Rebuttal and Budget Praise
Speaking at the same Edinburgh event, Scotland Office minister Kirsty McNeill robustly defended the Chancellor and the Budget. She argued that the Labour government had inherited an economy in a "terrible state" and had successfully stabilised it, citing five interest rate cuts since taking office.
Ms McNeill dismissed calls for Ms Reeves to resign, praising her for delivering "a superb job of having a Labour Budget guided by Labour values." She highlighted benefits for Scotland, including an estimated £10 billion in extra funding for Scottish public services and a £150 reduction in average energy bills.
"It was a great Budget for Scotland," McNeill concluded, framing the controversy as a political disagreement rather than a matter of factual accuracy.
