John Swinney: Rachel Reeves 'untenable' as Chancellor after having 'very clearly' misled public
John Swinney has suggested Rachel Reeves’ future as Chancellor was “untenable”.
First Minster John Swinney has called for Rachel Reeves to quit after she "very clearly" misled the public over the state of the UK’s finances.
The Labour Chancellor is under intense pressure from opponents after not making public a forecast surplus of more than £4 billion from the Office for Budget Responsibility (OBR) in the lead-up to last week’s Budget in which she announced £26 billion worth of tax rises due to the perceived fiscal challenges. The Chancellor is facing accusations she misled the public.
On Monday, the OBR chairman, Richard Hughes, quit after the organisation published details of Ms Reeves’ Budget before she delivered it, in an embarrassing gaffe for the UK government.
Labour UK ministers have denied any suggestion that Ms Reeves misled voters, with Chief Secretary to the Prime Minister Darren Jones saying there was a “funding gap” which needed to be addressed.
On Monday, Prime Minister Sir Keir Starmer insisted there was “no misleading” by Ms Reeves, who has forced to deny reports from an unnamed UK minister who claimed the Cabinet was “at no point” told about the “reality” of the OBR forecasts.
The UK government has said the OBR forecast showing a £4.2bn surplus against Ms Reeves’ borrowing rules did not take into account policies such as the welfare reform U-turn or the abolition of the two-child benefit cap, so was not the full picture.
One Scottish Labour MP told The Scotsman that much of the criticism had been a “politically-motivated witch hunt”, but warned “the lead up to the Budget was less than ideal” adding that “we need to learn lessons quickly about our messaging and making a consistent voice”.
They added: “We seem to have a confidence issue and I think the public can maybe sense that. Our opponents certainly can.”
Mr Swinney spoke out on the issue as he attended a ground-breaking ceremony for the Dunard Centre in Edinburgh, the city’s first new concert hall to be built in 100 years.
He told journalists: “Rachel Reeves very clearly misled the public.
“She had information from the Office for Budget Responsibility (OBR) before she made her infamous Downing Street speech, in which she suggested the situation was much graver than it actually was.”
The First Minister said the Chancellor’s position appeared to be “untenable” and the case should be referred to the UK government’s ethics adviser.
He said the Scottish Government is considering the implications of the UK Budget, ahead of the Scottish Budget being revealed, later than usual, in January.
Speaking earlier at the same event in Edinburgh, Scotland Office minister Kirsty McNeill said Labour had inherited an economy in a “terrible state”.
She said: “We’ve been able to stabilise the economy. That’s why we’ve been able to have five interest rate cuts since Labour came to power.”
Ms McNeill dismissed calls for the Chancellor to quit, saying: “The Chancellor did a superb job of having a Labour Budget guided by Labour values.
“It’s taken £150 off people’s energy bills. We’ve got £10 billion extra coming in to the Scottish Government to fund Scottish public services.
“It was a great Budget for Scotland, and one focused on Labour values.”
The Scottish Conservatives have called on Scottish Labour leader Anas Sarwar to break his silence on the stand-off and set out whether he backs Ms Reeves to continue as Chancellor.
Scottish Conservative shadow finance secretary Craig Hoy said: “Anas Sarwar must tell Scottish voters what he thinks about the Labour Chancellor lying to the nation, instead of hiding away and hoping this scandal will pass.
“Rachel Reeves shamefully misled the public and the markets about the state of the nation’s finances in the weeks running up to the Budget.”
He added: “There was no need to raise taxes to balance the books. Her Downing Street press conference was a deplorable ruse to pave the way for Labour’s latest reckless splurge on benefits.
“The Scottish Labour leader has a duty to explain to Scots why they should be hit with another brutal rise in household and business bills, just so that Reeves and Starmer can play political games.
“Does he condone the Chancellor lying to the country or does he agree that she has forfeited all trust and simply has to go?”
Ms Reeves faces more pressure after ignoring persistent calls from the North Sea oil and gas sector to bring forward her reforms to the energy profits levy - after fossil fuel giant, Harbour Energy, confirmed it would cut another 100 jobs, citing an “uncompetitive tax regime”.
Managing director Scott Barr said the process is necessary to make sure its UK business “remains competitive as we continue to adapt to a challenging future”.
Harbour said it has come under pressure from lower commodity prices and an “uncompetitive tax regime”, explicitly warning the situation has worsened after the UK government opted to retain the energy profits levy in last week’s Budget.
The latest cuts mean that Harbour will have axed around 700 jobs since the tax was introduced in 2022, including around 250 onshore job losses in Scotland earlier this year.
Harbour said the job losses will follow a consultation period, which is likely to conclude in the first quarter of 2026.
Mr Barr said: “The offshore reorganisation is a necessary step to align our operating model with reduced activity and production levels in the UK, accelerated by the retention of the energy profits levy (EPL), while maintaining our commitment to safety and regulatory standards.
“Harbour’s UK business unit will continue to struggle to compete for capital within our global portfolio while the EPL remains.”
SNP Westminster leader, and Aberdeen South MP, Stephen Flynn, said the job losses were “on the Labour Party”.
He added: “They have been repeatedly warned by trade unions, academics, charities and those on the front line in the industry that their tax on Scotland's energy is costing jobs and investment - but they have chosen to ignore everyone and, instead, argue that the Labour Party knows best.
"Another 100 families now face an uncertain future because of the choices made by this Labour government - this isn’t a ‘just transition’, it’s a cliff-edge and it is the Labour Party’s to own.
"For a party that boasts it is supposedly for working people, they sure can’t wait to put people out of work. The Labour Party's legacy looks like it will be every bit as damaging to our oil and gas sector, as Thatcher was to our coal communities.
"Anas Sarwar used to say he believed the tax was wrong, only to merrily describe it as ‘the right decision’ last week - it's time he apologised for the devastation the Labour Party is inflicting on jobs in the North East and on the Scottish economy.”
Comments
Want to join the conversation? Please or to comment on this article.