Reeves criticises budget leaks and says income tax decision taken ‘in partnership’ with PM

Rachel Reeves has condemned leaks before her make-or-break budget as “unacceptable” as she revealed her income tax U-turn was agreed in partnership with Keir Starmer.

Defending her tax and spending plans before MPs on the Commons Treasury committee, the chancellor said she had been frustrated by “leaks that were clearly not authorised” before her November speech.

“I want to reiterate in the strongest terms that leaks are unacceptable,” she said. “The budget had too much speculation, there were too many leaks, and much of the leaks and speculation were inaccurate. [It was] very damaging, as well as the IT security issues.”

In the run-up to the budget the chancellor gave a set-piece speech that was widely interpreted as preparation for a manifesto-busting income tax rise to help plug a shortfall in the public finances.

However, the Financial Times reported less than a fortnight later that the plan had been dropped, triggering a sharp sell-off in bond markets amid investor concerns over the government finances.

Reeves said she was “absolutely categorical” there had been no authorised briefing, although she revealed she and the prime minster had been preparing to announce an income tax rise before abandoning the plan because other tax measures raised sufficient revenues.

“We did look at whether we needed to increase the rates of income tax given our concerns around the forecast … In the end that was not necessary,” she said.

The chancellor said her plans were formed “in close partnership” with Starmer, whom she met two to three times a week in the run-up to the budget. “We decided it together as a team because that is what the prime minister and I am.”

In the chaotic weeks after the budget, the chair of the Office for Budget Responsibility (OBR), Richard Hughes, resigned after taking responsibility for the inadvertent early release of its budget documents just before Reeves stood up to announce the measures in the Commons.

Reeves said a replacement for Hughes was unlikely to be found before her spring statement.