Politics
Reeves under pressure as leaked OBR papers cast doubt on Budget ‘black hole’ claim
Chancellor faces calls for investigation after surplus revealed weeks before tax rises
RACHEL REEVES is facing mounting pressure tonight after leaked documents suggested the Treasury may have overstated the scale of Britain’s financial problems ahead of last week’s Budget.
The Chancellor repeatedly warned of a “black hole” in the public finances during a series of interviews in November, arguing the UK needed “fiscal headroom” to protect against economic shocks. The claim was central to the Government’s justification for around £26 billion in tax rises, including changes to capital gains, business taxation, and duties on property.
Leak reveals £4.2bn surplus
However, a leak from the Office for Budget Responsibility (OBR), first reported over the weekend, shows the UK was actually running a £4.2 billion surplus as recently as late October – weeks before Reeves delivered her Budget.
The revelation has triggered a storm at Westminster, with opposition parties accusing the Chancellor of misleading the public and Parliament. Critics say Reeves used the prospect of a large deficit to lay the groundwork for tax rises that may not have been necessary.
Ministers and civil servants have told national outlets they were not informed about the surplus ahead of the Budget, leading to tensions inside Government.
Reeves denies lying
Speaking to broadcasters on Monday, Reeves insisted she had not lied, saying she had been “honest and frank” about the need to rebuild the nation’s fiscal resilience.
She argued that an OBR downgrade in productivity forecasts meant expected tax receipts were weaker, making it “prudent” to increase fiscal headroom now. “We cannot gamble with the economy,” she said.
Labour sources have also pointed to expected rises in welfare costs and public-sector spending pressures.
Ministerial code questions
Opposition figures are now calling for an investigation into whether the Chancellor breached the ministerial code, which requires ministers to give accurate information.
Some have gone further, suggesting the Financial Conduct Authority may need to consider the impact of potentially misleading statements on markets. The Government has dismissed those suggestions as “political theatre”.
The row intensified after the head of the OBR resigned on Sunday, describing the leak as a “technical but serious” breach of confidentiality. The timing has raised fresh questions about who knew what – and when.
Storm not over
The Prime Minister has publicly backed his Chancellor, insisting the Budget was based on the best information available at the time.
But with senior economists warning that public confidence in fiscal transparency has been damaged, and with several Cabinet ministers privately expressing frustration over communication inside the Treasury, the controversy shows no sign of fading.
Parliament is expected to press for further answers when Reeves appears before the Treasury Select Committee later this week.
News
Trump tariff threat reignites ‘NHS Trump tax’ row as Lib Dems urge retaliation
THE WELSH LIB DEMS have urged the UK Government to scrap what they brand an NHS “Trump tax” and to coordinate with European allies on countermeasures after Donald Trump announced a 10% tariff on UK goods from Saturday, February 1 — linking the move to his demand that the United States should acquire Greenland.
Jane Dodds MS, leader of the Welsh Liberal Democrats, said Wales would be among the parts of the UK most exposed to a tariff shock, warning that key sectors including advanced manufacturing, steel, food and drink, and life sciences are particularly vulnerable to rising trade barriers and market uncertainty.

She also argued the Greenland threat should not be treated as a routine trade dispute, describing it as economic coercion aimed at the sovereignty of Denmark — a democratic NATO ally — and a dangerous precedent for global security and international law.
Dodds said: “Donald Trump is trying to bully the UK and ransom the sovereignty of Greenland… That is economic coercion, and it cannot be met with appeasement.”
Call for coordinated retaliation
The Welsh Liberal Democrats are calling on Prime Minister Keir Starmer to work “in lockstep” with European partners to prepare a coordinated package of countermeasures and retaliatory tariffs, saying economic bullying must be met with a firm and united response.
They argue that acting alongside Europe would strengthen the UK’s hand and reduce the risk of Britain being picked off in bilateral disputes.
Dodds said: “We must also work in lockstep with our European partners to prepare a robust package of countermeasures and retaliatory tariffs to hit Trump and his cronies where it hurts… Britain is strongest when we stand alongside Europe, not when we act as a doormat for a bully.”
Wales’s exposure to a tariff shock
Although tariff announcements tend to be framed in national terms, the Welsh Liberal Democrats say the impact could be highly regional, hitting areas where export-reliant industries are concentrated.
Wales has major employers and supply chains linked to manufacturing, steel and food production, and the party warned that any sudden increase in costs for exporting to the United States could make Welsh products less competitive overnight — while uncertainty alone can chill orders and investment.
The party’s argument is that Wales has more to lose than most if the dispute escalates: fewer alternative markets for some producers, greater exposure to supply chain disruption, and less resilience in communities where one major employer underpins large parts of the local economy.
What is the ‘NHS Trump tax’?

At the heart of the Liberal Democrat intervention is a long-running row over medicines pricing and UK–US trade policy.
The Liberal Democrats have previously used the term “Trump tax” to describe what they say would be billions of pounds in additional pharmaceutical costs to the NHS, arguing that UK policy risks inflating the price of medicines and effectively transferring money from public health budgets into higher drug costs.
Dodds said: “This Government is still planning to hand over £3 billion a year in a so-called ‘Trump tax’ on our NHS through inflated pharmaceutical costs. With health and care services in Wales under immense strain, that is indefensible. Scrap the Trump tax and put that money into frontline care.”
However, the £3bn figure and the way it is presented remain disputed. Ministers and some analysts have previously challenged claims of an annual “tax” of that scale, arguing the numbers depend on assumptions and timeframes, and that the NHS retains protections on medicines pricing.
In short: the Liberal Democrats say the policy is a costly concession that should be reversed immediately — while the Government is likely to argue that the characterisation is politically loaded and that NHS safeguards remain in place.
Greenland: trade spat or geopolitical coercion?
By tying tariffs to the question of Greenland, the Liberal Democrats say Trump is pushing beyond normal trade leverage and into geopolitical coercion — a framing designed to increase pressure on the UK Government to respond not just economically, but as a matter of democratic solidarity.
The party says the UK should treat the Greenland threat as an issue of allied sovereignty and global norms, warning that failure to stand up to it could invite similar pressure tactics elsewhere.
But ministers may calculate that cooler diplomacy is more effective than public escalation — particularly given the UK’s long-standing security relationship with the United States, the role of NATO, and the reality that trade wars can rapidly damage businesses and consumers on both sides.
The Government may also argue that the UK must keep channels open to reduce the risk of tariffs widening beyond the initial 10% or spilling into other areas such as defence procurement, services, or strategic cooperation.
Why the Lib Dems say Europe matters
The Welsh Liberal Democrats say this crisis underlines the case for closer UK relations with the European Union, arguing that coordinated action would carry more economic weight and send a clearer message than unilateral UK measures.
They also point to Canada as an example of a democratic ally willing to stand firm and prepare countermeasures, arguing that deterrence — not concession — is the only language Trump respects.
Dodds said: “Canada has shown you do not deter Trump by pleading. You deter him by standing firm and being ready to act. The Prime Minister should do the same and defend our economy, defend our allies and defend our values.”
The political test at Westminster
The row sets up a high-stakes balancing act for Labour: projecting toughness against “economic bullying” while avoiding an all-out trade war that could rebound on UK consumers and exporters.
If the UK Government declines to pursue retaliatory tariffs, it risks being accused of weakness. If it retaliates too aggressively, it risks triggering further escalation.
For Welsh Labour in particular, the pressure is twofold: demonstrating it will stand up for Welsh industry and jobs, while also holding together a coherent UK-wide trade and foreign policy stance.
What happens next
The immediate question is whether the tariff threat becomes policy on February 1 — and whether it is confined to a narrow range of goods or becomes the opening move in a broader trade confrontation.
The second question is how the UK chooses to respond: quietly through negotiation, publicly through retaliatory tariffs, or in tandem with European allies in a coordinated package.
For the Welsh Liberal Democrats, today’s message is blunt: scrap the policy they say inflates NHS medicines costs, stand with Europe, and treat Greenland as an allied sovereignty issue — not a bargaining chip.
For ministers, the challenge is to protect Welsh exporters and UK consumers while navigating a dispute that mixes trade, diplomacy and security — and to do so without conceding ground on principles that democratic allies consider non-negotiable.
News
Rail powers row as Lib Dems demand full devolution — and warn Wales is being left behind
RAIL powers are set to become the next front in the constitutional tug-of-war between Cardiff Bay and Westminster after the Liberal Democrats tabled an amendment to the UK Government’s Railways Bill calling for the full devolution of rail responsibility to Wales.
The party says Wales should be placed on the same footing as Scotland, with control over rail infrastructure, services and funding transferred to Welsh Ministers within two years. If selected for a Commons vote, the amendment would force MPs to take a clear position on whether Wales should hold the same levers Scotland already has — or continue under a system where key decisions remain reserved to Westminster.
Welsh Liberal Democrat Westminster spokesperson David Chadwick MP said Wales had been treated as an “afterthought” on rail investment for too long, and argued that projects based entirely in England have repeatedly been treated as “England and Wales” schemes for funding purposes — a classification he said has left Wales losing out on investment worth billions.
“This amendment is about fairness,” he said. “It would give Wales the same control Scotland already has and stop us losing out on billions of pounds for rail projects that don’t even touch Welsh soil.”
A split system with uneven power
Rail responsibility in Wales is currently divided. The Welsh Government oversees Transport for Wales and the Wales and Borders rail contract — the face of day-to-day passenger services — but most rail infrastructure decisions remain in Westminster hands through UK-controlled structures.
Critics say the arrangement leaves Wales stuck in the worst of both worlds: expected to deliver improvements, timetables and passenger experience while lacking full control over the track, long-term investment pipeline and major infrastructure funding.
Supporters of full devolution argue it is impossible to run a coherent transport strategy when responsibility is split — and that Wales is left dependent on consultation rather than authority.
Why it matters in West Wales
In Pembrokeshire and Carmarthenshire, where communities are more reliant on a limited number of rail corridors, the impact of investment decisions made elsewhere can be felt more sharply than in big cities with multiple alternatives.
Campaigners regularly point to the practical issues affecting West Wales passengers: reliability problems, the vulnerability of services to disruption on single-track sections, limited frequency, and the knock-on effect when services are cancelled or delayed because the system has little spare capacity.
There is also a wider economic argument. Better rail connections can influence commuting options, tourism flows, access to education and training, and business confidence — but rural and coastal routes can struggle to win funding in competition with high-profile projects elsewhere.
The Liberal Democrats argue that if Welsh Ministers held the full set of powers — not just operational control of services but authority over infrastructure and long-term funding — Wales could plan upgrades around Welsh needs, rather than waiting for decisions that must fit UK priorities.
What the Railways Bill changes
The Railways Bill is intended to reshape the way Britain’s railways are run, with the creation of Great British Railways and a new model for rail governance.
The Liberal Democrats claim the reforms risk entrenching central control and leaving Wales in a weaker position — locked into a system where Welsh institutions are “consulted” but not in charge.
The party is urging Welsh Labour MPs to back the amendment, framing it as a straightforward equality issue: Wales should have what Scotland has, and not be asked to settle for less.
The Government’s likely response
Ministers are expected to argue that rail infrastructure operates as part of an integrated network and that a UK-level approach can provide stability, economies of scale and coordinated planning.
There is also a money-and-risk debate at the heart of rail devolution. Full control of infrastructure would mean full responsibility for maintenance, renewals and long-term liabilities — and critics warn that if devolution is not matched with a guaranteed and fair funding settlement, Wales could inherit responsibility without the resources to meet it.
Some Westminster voices have historically warned against a “keys but not the fuel” scenario — where Wales gains power on paper but is left with difficult choices if costs rise faster than the funding formula.
Supporters of devolution counter that the current system already exposes Wales to risk — the risk of being outvoted, overlooked, or structurally underfunded — and that true accountability requires the power to make and fund decisions at home.
Welsh Government stance
Welsh ministers have repeatedly argued that rail infrastructure should be devolved so that planning, investment and services can be aligned with Welsh transport priorities, including decarbonisation and better integration between rail and bus networks.
The Welsh Government’s case is that Wales can only fully deliver a joined-up transport strategy if it holds the whole system — not just the passenger contract but the infrastructure control needed to shape outcomes.
Whether the UK Government is prepared to go that far remains uncertain, particularly if ministers believe the Bill’s reforms are designed to strengthen national coordination.
The numbers and the politics
The Liberal Democrats have 72 MPs, but would need support from other parties — including Welsh Labour MPs — to have any realistic chance of forcing a change if the amendment is selected for a vote.
That sets up a politically awkward test for Labour MPs in Wales, caught between party discipline at Westminster and growing pressure to demonstrate that Wales will not be treated as a junior partner when national infrastructure decisions are made.
For Welsh Labour, the question is whether to back a clear-cut devolution demand — or to argue that the Government’s reforms will deliver benefits for Wales through new structures, improved coordination and a different approach to investment.
If it passes — and if it fails
If the amendment succeeded, the next battle would be over the detail: the funding formula, the transfer of assets and liabilities, and the timetable for transition. Supporters would see it as a step towards a rail system planned around Welsh priorities — including rural and coastal routes too often seen as an afterthought.
If it fails, the Liberal Democrats are likely to use the vote to sharpen their wider argument: that Wales is still being asked to accept second-tier powers — and that rail remains a symbol of a devolution settlement that does not yet match the reality of Welsh nationhood.
Either way, the amendment has ensured one thing: the Railways Bill will not pass quietly in Wales.
Health
MS calls for corridor care data to be published in Wales
Conservatives say ministers must be held to account as health chief confirms figures are not routinely available
CONSERVATIVE MS Andrew RT Davies has demanded Senedd ministers begin collecting and publishing data on “corridor care” in Welsh hospitals, after the Welsh Government confirmed it is not currently able to provide routine figures.
Mr Davies raised the issue in the Senedd during questions to Health Minister Jeremy Miles, asking whether information is being gathered on patients being cared for in corridors and, if so, how many people are affected.
Mr Miles told MSs the data is not currently available in a form that can be published routinely, but said the Welsh Government is “trialling approaches” which would put ministers in a position to provide regular publication.
The exchange comes amid ongoing concern across Wales about severe pressure in emergency departments and delays in moving patients into appropriate ward beds — a situation that can result in people waiting for treatment, assessment or admission in areas not designed for patient care.
The term “corridor care” is widely used to describe circumstances where patients receive care in inappropriate settings, often due to a lack of capacity elsewhere. Health bodies and staff representatives have warned that such conditions can affect privacy and dignity, make infection control harder, and place additional strain on staff working in already pressured environments.
Mr Davies said he had been contacted by constituents in the Vale of Glamorgan reporting what he described as unacceptable experiences in local hospitals, adding that frontline NHS staff should not be blamed.
He also linked the issue to wider spending priorities at the Senedd, claiming that services were under strain while ministers pursued other policies, including plans to expand the size of the Senedd and maintain a “Nation of Sanctuary” approach to asylum seekers.
Mr Davies said it was vital that corridor care data was collected and published so that the scale of the problem could be measured and ministers held to account.
Mr Davies said: “I’m frequently contacted by Vale constituents reporting unacceptable experiences in local hospitals.
“This is not the fault of NHS staff – but hospitals are underfunded thanks to resources instead going towards Plaid Cymru separatist and Labour plans for 36 more Senedd members and a Nation of Sanctuary for asylum seekers.
“We must end corridor care – and it’s vital this data is made available to hold Senedd ministers to account.”
In response, the Welsh Government position is that it is working on ways to standardise and publish information on corridor care, but that the data is not yet routinely available across the system.
Opposition parties and health campaigners have argued that without clear national reporting, it is harder for the public and Senedd members to understand how widespread the issue is, whether it is improving, and which hospitals are under the greatest pressure.
The Welsh Government has not yet set out when routine publication will begin, but ministers say the trial work is intended to enable regular reporting in future.
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