James Bowler, the Treasury’s top civil servant, has been embroiled in the growing controversy over whether Chancellor Rachel Reeves misled the public about the nation’s finances before the Budget.
Senior figures at the Office for Budget Responsibility (OBR) revealed to the Treasury select committee on Tuesday that Bowler had approved the publication of a letter showing Reeves was aware the financial hole was smaller than previously thought.
The letter’s release on Friday sparked accusations that Reeves had falsely represented the shortfall to justify her £30bn tax raid, leading to calls for her resignation.
Prof David Miles and Tom Josephs, two members of the OBR’s Budget Responsibility Committee, told the committee they had cautioned the Treasury that pre-Budget briefings and leaks had « exacerbated » uncertainty and potentially harmed growth, further increasing pressure on Reeves.
The row centers on whether the Treasury exaggerated the financial challenges before the Budget to provide political cover for raising taxes.
Reeves accused of breaking manifesto promises
Reeves held a press conference suggesting she would have to break Labour’s manifesto promises on tax due to the challenging state of public finances.
However, the OBR disclosed in a letter on Friday that Reeves had been informed before the press conference that her fiscal headroom was £4bn, only slightly down from the £10bn in the spring.
It then came to light that Bowler had approved the release of the letter, intensifying pressure on the Chancellor and fueling accusations of misleading the public.
Bowler named in OBR evidence
Prof Miles and Josephs named Bowler in their evidence to the Treasury committee, stating he had been liaising with Richard Hughes, the OBR chairman who wrote the letter on Friday and resigned on Monday after accepting responsibility for the OBR forecast leak.
Both Reeves and Bowler are set to appear before the Treasury committee next Wednesday for questioning on how the Budget was spun.
One MP on the committee told The Telegraph there was suspicion that the permanent secretary shared some of the OBR’s concerns about Reeves’s briefings.
The MP speculated that Bowler « was probably uncomfortable with the way the political team were leaking stuff and undermining the credibility of the Budget process. »
Treasury insiders denied any split between the department’s top mandarin and the Chancellor, insisting Reeves approved the release of the OBR’s letter. They said the reference to the importance of private discussions reflected the OBR’s own stance.
The Express has emailed the Treasury for comment.
Calls for investigation into Budget leaks
Sir Mel Stride, the Tory shadow chancellor, has written to Bowler demanding an investigation into the Budget leaks.
He said: « Mixed messages from the Treasury – including whether the OBR was right to publish its letter – only deepen concerns about these pre-Budget leaks. »
« The integrity of the Budget process matters, and we need clear answers from Rachel Reeves and the Prime Minister fast. »
Nigel Farage, the Reform leader, questioned why Sir Laurie Magnus, the Prime Minister’s ethics adviser, had not responded to his Sunday letter calling for an investigation.
Farage told The Telegraph: « I am very surprised not to have had a response. I believe the grounds to investigate this are sufficient. The British public deserves answers. »
Separately, Andrew Bailey, the Governor of the Bank of England, warned against « attacks » on the OBR and stressed the importance of its continued existence.
Bailey said: « The reason the OBR was created was to ensure there was a source of independent forecasting and independent assessment of fiscal policy. And that’s important. »
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