Rachel Reeves will not face an official probe into claims she lied about the state of the economy before the Budget, it emerged today.
Reform leader Nigel Farage had demanded the Chancellor be investigated for saying there was a black hole in the public finances of more than £20billion, which it later emerged did not exist.
She has also been accused of ‘market abuse’ and misleading voters by the Tories ahead of a Budget in which she hit working Britons with tax rises in order to increase benefit payments.
Mr Farage told the independent adviser on ministerial standards, Sir Laurie Magnus, that her actions ‘plainly meet the threshold for investigation’.
But Sir Laurie wrote to the Reform leader yesterday to say he will not open a case into what happened, because it falls outside of his remit.
Reform leader Nigel Farage had demanded the Chancellor be investigated for saying there was a black hole in the public finances of more than £20billion, which it later emerged did not exist.
Mr Farage told the independent adviser on ministerial standards, Sir Laurie Magnus, that her actions ‘plainly meet the threshold for investigation’.
But Sir Laurie wrote to the Reform leader yesterday to say he will not open a case into what happened, because it falls outside of his remit.
It is the latest scandal involving Ms Reeves after she was rebuked at the end of October for failing to get a licence for renting out her family home.
Ms Reeves told Channel 4 News there was no need for an investigation into whether she misled the markets and taxpayers.
But The Times reported that even some of her ministerial colleagues feel misled. A senior figure told the paper: ‘At no point were the Cabinet told about the reality of the OBR forecasts.’
Writing to Sir Laurie, Mr Farage said voters faced ‘the heaviest tax burden in generations on the basis of what increasingly looks like a sustained misrepresentation of the true fiscal position’.
But he told the Reform leader there was no scope for him to look into the matter, as there was no sign she breached the ministerial code.
‘As set out in my terms of reference, my remit as Independent Adviser is to consider the conduct of individual ministers in the context of the Ministerial Code and, where necessary, to advise the Prime Minister accordingly,’ he wrote.
‘It is not within my remit to consider the collective actions of government departments or individuals other than ministers.
‘It is also outside my remit to consider questions of market regulation which fall under the statutory responsibility of the Financial Conduct Authority.
‘Given this, I do not see a basis for launching an investigation, as you have suggested, in the context of the provisions of the Ministerial Code.’
It came after the Financial Conduct Authority said it was not launching an investigation at the current time.
Chancellor Rachel Reeves has faced accusations that she misled voters by overstating the scale of the fiscal challenge in the run-up to last week’s budget, in which she announced £26 billion of tax rises.
FCA chief executive Nikhil Rathi said they had not begun an investigation, in a letter to Treasury committee chairwoman Meg Hillier on Wednesday.
He said concerns had been raised with the watchdog that market sensitive information could have entered the public domain as a result of government briefings and leaks, and that briefings by ministers may have been misleading and could have amounted to market manipulation.
But the way the Government communicates its position ahead of a fiscal event is ‘a matter for Parliament through its accountability mechanisms’, he said.
He said the FCA had requested the details of a leak inquiry that the Chief Secretary to the Treasury has confirmed is under way.
