Sir Mel Stride

My right hon. Friend is absolutely right, which is why that behaviour was so irresponsible. There are people who would have drawn down on their pensions because they were extremely concerned about what was being briefed out by the Treasury as to what changes may be coming down the line, and about their ability to do so after the Budget. We also had people leaving the country because they were worried about an exit tax, which was another kite flown by the Treasury. That grossly irresponsible behaviour had real-life impacts in the real economy. When it comes to misleading, there is much to consider in the complete mismanagement of the run-up to this Budget. That is not just my view. Indeed, a member of the Cabinet was quoted in the press saying, “the handling of this Budget has been a disaster from start to finish.” The impression that has been given is that there was a deliberate attempt to paint an inaccurate picture of the public finances, designed to give political cover for Labour’s plans for more taxes and more welfare spending. The Chancellor delivered a pre-Budget statement in Downing Street on 4 November in which she said that the OBR would be downgrading its productivity forecast, meaning lower tax receipts, but she failed to mention that in reality the OBR’s forecast had already shown her four days earlier that overall tax receipts were £16 billion higher—not lower—than previously thought. To quote the OBR’s Budget report: “In isolation, the reduction in productivity growth could have lowered revenues by around £16 billion in 2029-30. However, the boost to receipts from higher inflation and changes to the composition of nominal GDP growth…more than offset this.” Ministers have pointed out that there was a need to increase headroom, but that was not the justification for tax rises that was being made before the Budget, and it is an admission that the headroom that the Chancellor left in her first two fiscal events was inadequate and irresponsible. Crucially, it also fails to acknowledge that a significant proportion of the increase in taxes was used to fund policy decisions to spend more on welfare. On 14 November, the media were briefed that a plan to increase income tax rates had been dropped following an improved forecast from the OBR. We now know that that was simply untrue. The finalised pre-measures forecast came weeks before this, on 31 October. That is why it is vital that the Financial Conduct Authority investigates the briefings and leaks that went on, and I have written to it again this week on that matter. Even after the Budget, in a Guardian interview, the Chancellor said that income tax rises had remained on the table well into November, “because we didn’t know the size of the downgrade, the productivity”. Again, that is simply untrue. We now know that at no point was there a deficit of the scale suggested to the media. We know that because the OBR felt it necessary to take the unprecedented step of publishing its forecast rounds in full. The question remains as to why Ministers seem to have been so unconcerned about what was appearing in the press, when the OBR has now revealed that the alarm was being raised before the Budget. The reality is that the briefings and leaks were a smokescreen designed to distract from the real reason that taxes were going up, the utter weakness of this Labour Government and the need to buy off their Back Benchers with yet more welfare spending. In the process, the uncertainty and speculation fuelled by the Treasury had an impact on families and on growth. As my right hon. Friend the Member for South West Wiltshire (Dr Murrison) rightly pointed out, people made decisions about their finances. They locked in higher mortgage rates, and businesses put off making investments and hiring workers. The British public have been left worse off and they have been misled. They deserve an apology, and they deserve much better than this weak and irresponsible Government.