Senior cabinet minister Darren Jones has said he does not feel misled by Rachel Reeves “in the slightest” following claims she told the cabinet there was a hole in public finances to justify tax rises.
Mr Jones, Chief Secretary to the Prime Minister, told Mornings with Ridge and Frost the chancellor was “right all the way through that we needed to raise more money than was available… through the OBR forecast”.
Some ministers have told The Times Ms Reeves did not tell the cabinet “the reality” of the Office for Budget Responsibility (OBR) forecasts.
But asked if he felt misled by the chancellor, Mr Jones said: “No, not in the slightest.
“The chancellor didn’t say anything of the kind.”
Two days after last Wednesday’s budget – when Ms Reeves set out a record-breaking £26bn in tax rises -,the OBR took the unusual step of revealing the figures it sent to the Treasury to dispel suggestions of a significant hole in public finances.
The chancellor and Prime Minister Sir Keir Starmer had spent weeks saying public finances were in such a dire state they would need to break their manifesto pledges and raise taxes.
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Ms Reeves is now facing accusations she lied to the public, with opposition parties demanding she answer an urgent question in parliament over their claims they misled voters and the markets.
On Sunday, when asked by Sky’s Trevor Phillips if she lied, Ms Reeves said: “Of course I didn’t.”
Mr Jones defended the chancellor, saying the OBR’s calculations did not take into account fiscal headroom. Ms Reeves had been “very clear” this needed to be increased to deal with any shocks.
The former Chief Secretary to the Treasury said the calculations produced by the OBR moved around ahead of the budget and “you don’t actually know the final number until the very end of the process”.
Mr Jones added: “The chancellor was very clear we needed more [headroom] than we’ve had in the past, so she took it from £10bn to over £20bn.
“That means that if there’s a shock in the future, we have more cash put aside to be able to respond to it.”
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The OBR told the chancellor on 31 October the spending gap had closed and the government would be running a £4.2bn surplus.
That was a few days before she suggested at a news conference she was likely to have to break a manifesto promise and raise income tax rates to secure the UK’s economic future – a plan that was dropped before the actual budget.
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By 26 November, the day of the budget, the headroom had risen to £21.7bn, the OBR’s forecast states.
On Monday, Sir Keir will deliver a speech in which he is expected to defend the decisions made in the budget and say it “moves forward the government’s programme of national renewal”.
