Reeves Holds Pre-Budget Conference Signaling Difficult Fiscal Choices
On 4 November, Reeves held an extraordinary pre-Budget news conference, a novel and voluntary event designed to set the ground for a Budget marked by difficult choices. Weeks earlier, she had laid some groundwork in a breakfast speech. During the conference, Reeves signaled big tax rises and measures to address the cost of living, aligning with plans for the forthcoming Budget. She sought extra headroom in her spreadsheets under self-imposed fiscal rules, while preserving long-term investment spending. Productivity was a significant focus; the Office for Budget Responsibility (OBR) was expected to revise down productivity growth, which would affect the numbers and policy trade-offs. Notably, Reeves was aware that tax receipts were stronger than expected, offsetting the productivity drag, but she did not disclose this information at the time. Approximately ten days later, the Treasury disclosed the stronger tax receipts following a Financial Times report indicating that income tax rates would not change, which reassured markets. The Treasury maintains it is unfair to say she misled, arguing that she faced significant headroom challenges and policy choices. The OBR could justify different forecast bases, and former OBR chief Richard Hughes was not appearing before MPs to provide further insight.
