Reeves Holds Pre-Budget News Conference Amid Fiscal Uncertainties
On 4 November, Reeves held an extraordinary pre-Budget news conference, described as novel and voluntary, to set the stage for a Budget with difficult choices. Her breakfast speech that morning largely laid the groundwork for the Budget and referenced measures to address the cost of living. She discussed headroom in fiscal rules and delivered on long-term investment spending, with a focus on productivity as the Office for Budget Responsibility (OBR) was expected to revise down productivity growth.
A key point emerged that Reeves appeared to have been misled only insofar as she knew tax receipts were better than expected and offset the productivity downgrade; this information was not shared at the news conference itself. The OBR later clarified when it informed the Treasury about the stronger tax receipts data. The Treasury eventually disclosed this information, particularly about the non-change in income tax rates, 10 days later after a market briefing.
Following this, market reassurance messaging was issued, with briefings stating tax receipts were stronger than expected to justify policy choices. Reeves' team aimed to reassure markets rather than mislead. The Treasury maintains that Reeves was not misleading, arguing she faced a hole in her spreadsheets headroom and acted conservatively, supported by the numbers. Meanwhile, former OBR director Richard Hughes will no longer answer MPs' questions on Tuesday, with further insight awaited.
