Business
No 10 denies Reeves misled public in run up to Budget
Downing Street has denied Chancellor Rachel Reeves misled the public about the state of the public finances in the run-up to this week’s Budget.
There were warnings ahead of the Budget that Reeves could face as much as a £20bn gap in meeting her rule of not borrowing for day-to-day spending.
But in a letter to MPs, the chairman of the Office for Budget Responsibility (OBR) said he had told the chancellor in mid-September the gap would be much smaller.
Conservative leader Kemi Badenoch said the letter showed Reeves had “lied to the public” and should be sacked.
The weeks leading up to the Budget were dominated by speculation the chancellor would increase the rates of income tax, breaking a Labour manifesto pledge.
On 4 November, Reeves used a rare pre-Budget speech in Downing Street to warn the UK’s productivity was weaker “than previously thought” and that “has consequences for the public finances too, in lower tax receipts.”
Then, on 10 November, she told BBC Radio 5 Live: “It would, of course be possible to stick with the manifesto commitments, but that would require things like deep cuts in capital spending.”
These comments, along with her speech, fuelled speculation she needed to raise significant sums to meet her fiscal rules.
However, the Office for Budget Responsibility has now confirmed that before both of these interventions, it had told Reeves the government had in fact received higher than expected tax receipts, which offset the impact of the productivity downgrade.
That meant she had a surplus to meet both of her fiscal rules.
In a letter to the Commons Treasury select committee, OBR chairman Richard Hughes revealed that he told the chancellor on 17 September that the public finances were in better shape than widely thought.
The letter also reveals that on the 31 October the OBR the Treasury it was on course to meet both of the chancellor’s fiscal rules.
But Reeves continued to indicate that she was likely to increase income tax rates.
In her Downing Street press conference, she said: “It is already clear that the productivity performance…is weaker than previously thought.”
She added: “What I want people to understand ahead of that Budget, is the circumstances we face.”
However, the Treasury then backed away from increasing income tax rates, with government sources claiming this was because of better than expected forecasts from the OBR.
It has now emerged the OBR forecasts did not change significantly in the run up to the Budget.
Conservative shadow chancellor Sir Mel Stride said: “We now know the truth.
“Rachel Reeves spent the months leading up to the Budget claiming she would need to make difficult choices because of a downgrade in the economic forecasts that was not of her making.
“She even let it be known she was considering raising income tax rates.”
He claimed it was “all a smokescreen,” adding: “It appears the country has been deliberately misled.
“In doing so, some people may even have faced higher mortgage rates thanks to the impact on markets from Labour’s chaotic briefings.”
Asked whether Reeves had misled the public and the financial markets, the PM’s spokesperson said: “I don’t accept that.”
He added: “As she [Reeves] set out in the speech that she gave here (Downing Street), she talked about the challenges the country was facing and she set out her decisions incredibly clearly at the Budget.”
He added the government had increased the headroom for the Treasury to meet the fiscal rules, which would creates “certainty and stability for business”.
Business
Serial rail fare evader faces jail over 112 unpaid tickets
One of Britain’s most prolific rail fare dodgers could face jail after admitting dozens of travel offences.
Charles Brohiri, 29, pleaded guilty to travelling without buying a ticket a total of 112 times over a two-year period, Westminster Magistrates’ Court heard.
He could be ordered to pay more than £18,000 in unpaid fares and legal costs, the court was told.
He will be sentenced next month.
District Judge Nina Tempia warned Brohiri “could face a custodial sentence because of the number of offences he has committed”.
He pleaded guilty to 76 offences on Thursday.
It came after he was convicted in his absence of 36 charges at a previous hearing.
During Thursday’s hearing, Judge Tempia dismissed a bid by Brohiri’s lawyers to have the 36 convictions overturned.
They had argued the prosecutions were unlawful because they had not been brought by a qualified legal professional.
But Judge Tempia rejected the argument, saying there had been “no abuse of this court’s process”.
Business
John Swinney under fire over ‘smallest tax cut in history’ after Scottish Budget
John Swinney has been pressed over whether this week’s Scottish Budget gives some workers the “smallest tax cut in history” – with Tory leader Russell Findlay branding the reduction “miserly” and “insulting”.
The Scottish Conservative leader challenged the First Minister after Tuesday’s Holyrood Budget effectively cut taxes for lower earners, by increasing the threshold for the basic and intermediate bands of income tax.
But Mr Findlay said that would leave workers at most £31.75 a year better off – saying this amounts to a saving of just £61p a week
“That wouldn’t even buy you a bag of peanuts,” the Scottish Tory leader said.
“John Swinney’s Budget might even have broken a world record, because a Scottish Government tax adviser says it ‘maybe the smallest tax cut in history’.”
Raising the “miserly cut” at First Minister’s Questions in the Scottish Parliament, Mr Findlay demanded to know if the SNP leader believed his “insulting tax cut will actually help Scotland’s struggling households”.
The attack came as the Tory accused the SNP government of increasing taxes on higher earners, with its freeze on higher income tax thresholds, which will pull more Scots into these brackets.
This is needed to pay for the “SNP’s out of control, unaffordable benefits bill”, the Conservative added.
Mr Findlay said: “The Scottish Conservatives will not back and cannot back a Budget that does nothing to help Scotland’s workers and businesses.
“It hammers people with higher taxes to fund a bloated benefits system.”
Hitting out at Labour – whose leader Anas Sarwar has already declared they will not block the government’s Budget – Mr Findlay said: “It is absolutely mind-blowing that Labour and other so-called opposition parties will let this SNP boorach of a budget pass.
“Don’t the people of Scotland deserve lower taxes, fairer benefits and a government focused on economic growth?”
Mr Swinney said the Budget “delivers on the priorities of the people of Scotland” by “strengthening our National Health Service and supporting people and businesses with the challenges of the cost of living”.
He insisted income tax decisions in the Budget would mean that in 2026-27 “55% of Scottish taxpayers are now expected to pay less income tax than if they lived in England”.
The First Minister went on to say that showed “the people of Scotland have a Government that is on their side”.
Referring to polls putting his party on course to win the Holyrood elections in May, the SNP leader added that “all the current indications show the people of Scotland want to have this Government here for the long term”.
Benefits funding is “keeping children out of poverty”, he told MSPs, adding the Budget contained a “range of measures” that would build on existing support.
The First Minister said: “What that is a demonstration of is a Government that is on the side of the people of Scotland and I am proud of the measures we set out in the Budget on Tuesday.”
Meanwhile he said the Tories wanted to make tax cuts that would cost £1 billion, with “not a scrap of detail about how that would be delivered”.
With the weekly leaders’ question time clash coming less than 48 hours after the draft 2026-27 Budget was unveiled, the First Minister also faced questions from Scottish Labour’s Anas Sarwar, who insisted that the proposals “lacks ambition for Scotland”.
Pressing his SNP rival, the Scottish Labour leader said: “While he brags about his £6 a year tax cut for the lowest paid, one million Scots including nurses, teachers and police officers face being forced to pay more.
“Even his own tax adviser says this is a political stunt. So why does John Swinney believe that someone earning £33,500 has the broadest shoulders and therefore should pay more tax in Scotland?”
Mr Swinney, however, said that many public sector workers would be better off in Scotland.
He told the Scottish Labour leader: “A band six nurse at the bottom of the scale will take home an additional £1,994 after tax compared to the same band in England.
“A qualified teacher at the bottom of the band will take home £6,365 more after tax in Scotland than the equivalent in England. There are the facts for Mr Sarwar.”
Business
BP cautions over ‘weak’ oil trading and reveals up to £3.7bn in write-downs
BP has warned it expects to book up to five billion dollars (£3.7 billion) in write-downs across its gas and low-carbon energy division as it also said oil trading had been weak in its final quarter.
The oil giant joined FTSE 100 rival Shell, after it also last week cautioned over a weaker performance from trading, which comes amid a drop in the cost of crude.
BP said Brent crude prices averaged 63.73 dollars per barrel in the fourth quarter of last year compared with 69.13 dollars a barrel in the previous three months.
Oil prices have slumped in recent weeks, partly driven lower due to US President Donald Trump’s move to oust and detain Venezuela’s leader and lay claim to crude in the region, leading to fears of a supply glut.
In its update ahead of full-year results, BP also said it expects to book a four billion dollar (£3 billion) to five billion dollar (£3.7 billion) impairment in its so-called transition businesses, largely relating to its gas and low-carbon energy division.
But it said further progress had been made in slashing debts, with its net debt falling to between 22 billion and 23 billion dollars (£16.4 billion to £17.1 billion) at the end of 2025, down from 26.1 billion dollars (£19.4 billion) at the end of September.
It comes after the firm’s surprise move last month to appoint Woodside Energy boss Meg O’Neill as its new chief executive as Murray Auchincloss stepped down after less than two years in the role.
Ms O’Neill will start in the role on April 1, with Carol Howle, current executive vice president of supply, trading and shipping at BP, acting as chief executive on an interim basis until the new boss joins.
Ms O’Neill’s appointment has made history as she will become the first woman to run BP – and also the first to head up a top five global oil company – as well as being the first ever outsider to take on the post at BP.
Shares in BP fell 1% in morning trading on Wednesday after the latest update.
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