The Speaker of the Commons criticized Rachel Reeves for failing to inform MPs of a crucial announcement prior to the budget. Sir Lindsay Hoyle deemed it “completely unacceptable” that the chancellor revealed her plan to alter the government’s fiscal rules to the media before parliament – as stipulated in the ministerial code. Last week, Ms Reeves announced her intention to revise the fiscal rules to allow for an increase in borrowing for public investment by approximately £50bn. On Sky News in Washington DC, the chancellor stated that the self-imposed rule, which requires borrowing to decrease by the fifth year of economic forecasts, will be redefined from the current measure of public sector net debt. Ms Reeves declined to specify the new measure but there is speculation that she will opt for using public sector debt net of financial liabilities (PSNFL). This new definition would classify investments like the government’s student loans book as assets rather than liabilities, potentially permitting an additional £53bn of borrowing. The ministerial code outlines the expected standards of conduct for ministers and their duties.
Image: Chancellor Rachel Reeves in Washington DC on Thursday. Pic: AP
The code emphasizes that major announcements should be made in parliament when it is in session. Before Labour came to power, the Speaker also reprimanded Conservative ministers for leaking budget information to the media prior to the official announcement – even suggesting they should resign. Addressing MPs in the Commons, Sir Lindsay expressed his disappointment and stressed the importance of ministers facing thorough scrutiny when making announcements. He emphasized the need for respect towards the House and its members, highlighting that they were elected by the constituents and deserve better treatment. Looking ahead to the budget, Sir Lindsay warned that proper procedures should be followed and that all sides should respect the members. The prime minister confirmed tax increases in the budget to avoid a return to austerity and to enhance public services. In Birmingham, Sir Keir Starmer announced an increase in the £2 bus fare cap to £3 and an injection of £240m to boost employment efforts.
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Following weeks of speculation on the government’s economic growth plans and how to address the £40bn deficit in the nation’s finances, the first fiscal statement is set to be delivered on Wednesday. In response to the Speaker’s warning in parliament, the prime minister’s spokesperson stated that it is a parliamentary matter. They emphasized that Britain is on a path to growth and acknowledged the importance of the bus fare issue, citing the PM’s announcement of the £3 cap.