Rachel Reeves 'was investigated over her expenses' at HBOS

Rachel Reeves was investigated over irregularities in her expenses claims when she worked for a bank, it was claimed today.

The Chancellor and two other senior managers at the central bank are said to have been subject to an internal audit at Halifax Bank of Scotland (HBOS)  after whistleblowers alleged they were using the system to 'fund a lifestyle' including dinners, gifts and taxis.

A BBC investigation into the Chancellor's time there found that an initial probe found grounds to believe that rules had been broken, although it was unable to determine what the final outcome was .

A spokesman for the Chancellor told the broadcaster she was unaware any investigation had taken place, had always complied with expenses rules and had left the bank on good terms.

The investigation is the latest to raise questions about Ms Reeves' time as an economist before entering politics as MP for Leeds West and Pudsey in 2010.

Last year her claim in an interview with Stylist magazine from 2021 that she had spent a decade at the Bank of England, was contested, after it was revealed her LinkedIn account described it as a six-year period between 2000 and 2006.

She was also accused of claiming she was an 'economist' on official documents at a time when she was not working as one, later editing her LinkedIn profile to clarify that she was in 'retail banking'  at HBOS instead.

Tory leader Kemi Badenoch said: 'The BBC's investigation raises serious questions for Rachel Reeves. Keir Starmer said ''restoring trust in politics is the great test of our era''. 

'Until she comes clean - not just about her CV but about the circumstances in which she left HBOS, no one will take him seriously.'

But Prime Minister Sir Keir Starmer told broadcasters: 'Rachel Reeves has dealt with any issues that arise.

'She delivered a really important budget for the country that balanced the books, gave us stability, that is beginning to see those interest rates come down, those mortgages coming down as a result; beginning to see some of the growth we need.

'She is determined that we go further with that.

'So she can deal with the issues that arise out of this report many years ago.

'What I am concerned with – what she is concerned with, we get up every day to do – is to make sure that the economy in our country, which was badly damaged under the last government, is revived and we have growth, and that is felt in the pockets of working people across the country (so) they feel better off.'

A lawyer for the Chancellor has also said she was not subject to 'allegations of wrongdoing or misconduct' during her career in retail banking. 

Ms Reeves' spokesperson said she was 'not aware of an investigation nor was she interviewed, and she did not face any disciplinary action on this or any other matters'.

They added: 'All expenses were submitted and signed off in the proper way.

'Several former colleagues from her time at the bank, including HBOS' former HR business partner, have corroborated this account.

'Rachel left HBOS in 2009 on good terms.'

David Sorensen, the lawyer who represented her as she left the bank, said her exit was 'a standard-style agreement adopted by the company when a mutually agreed exit was made during the bank's restructure'.

Mr Sorensen, a managing partner at Morrish Solicitors, said: 'My clear understanding at the time was that my client, who was in a senior role, left on good terms when HBOS plc was acquired in 2009, as evidenced by the payments made to her, the retention of her company car and other benefits for a six-month period, and a favourable reference.

'Absolutely no allegations of wrongdoing or misconduct were mentioned by the HBOS HR team during this process.'

Jane Wayper, former HR business partner for HBOS who worked alongside Ms Reeves, also said she did not recognise any of the claims about her former colleague.

In a statement, she added: 'In my role, I would have been made aware of any investigation which concluded there was a case to answer.

'I would have been required to organise and oversee a disciplinary process. This did not happen.'