Rachel Reeves accused of “throwing the minister under the bus | Policy

Rachel Reeves has been accused of throwing a minister under the bus to defend her “duplicity” over changes to Britain’s tax rules.

Tory MP Nigel Huddleston also accused the chancellor of “fiddling with the numbers” and breaking her own rules in her social media comments.

On Friday, he wrote on X: “Before the election, Rachel Reeves said the tax rules were ‘non-negotiable’ and promised not to ‘fudge the numbers’.

“Yesterday (Thursday) she announced a change to the definition of government debt – breaking fiscal rules and transparently shaking up the numbers!

“And today they throw their minister under the bus, sent to the press to embarrassingly try to defend their duplicity. Your new chancellor, ladies and gentlemen!”

The MP’s attack came after Treasury Secretary James Murray told Times Radio that the Chancellor’s changes to her tax rules were in line with Labour’s manifesto commitment.

He said: “What the Chancellor has set out is what we committed to doing in our manifesto on the tax rules.”

Labour’s 2024 election manifesto said Ms Reeves would follow two rules: first, the current budget would be balanced so that day-to-day costs were covered by revenue, and second, debt must fall as a share of the economy until the fifth year. of the economic forecast.

On Thursday, she confirmed that the way debt is measured as part of that target will be changed to allow more flexibility.

Mr Murray told the radio station: “What the chancellor has said is the second of his tax rules, the investment rule, will make sure we measure debt differently to recognize the value of assets, not just the cost of investment.

“Because what is crucial is that we have investments in this country that will support greater growth for years to come.”

Former chancellor Jeremy Hunt said Ms. Reeves’ move would be punish families with mortgages. However, Mr Murray rejected the suggestion, also telling Times Radio that the changes to tax rules were about stabilizing and growing the economy.

He added: “This is crucial to making people better off and keeping mortgages and taxes as low as possible.”

The cost of government borrowing rose in financial markets, with government bond yields rising as much as eight basis points before easing on Thursday.

Lyn Graham-Taylor, a senior strategist at Rabobank, told Reuters: “It appears to be linked to Reeves last night suggesting that the fiscal rules would be rewritten to boost infrastructure spending.”

Ms Reeves is expected to target public sector net financial liabilities (PSNFL) as her new benchmark for government debt, rather than the current measure of underlying public sector net debt.

A switch to the PSNFL would give it more room to meet its debt-reduction goal because it includes a broader mix of state assets and liabilities, particularly expected student loan repayments to offset some from debt.

If the PSNFL had been used as the borrowing target in the March 2024 budget, the “head margin” – the margin by which the fiscal rule is met – would have increased by £53 billion, according to the Institute for Fiscal Studies.