British Prime Minister Sir Keir Starmer desperately tried to defend the future of his government on Monday amid accusations that Chancellor Rachel Reeves lied to the public over a supposed budget “black hole” to justify hiking taxes, as the head of the budget Quango tied up in the scandal falls on his sword.
Since coming into office last year on the back of the collapse of the Conservative Party, Sir Keir’s government has consistently pointed to a “black hole” in the budget left by their predecessors as the reason for abandoning the promised growth agenda in favour of a high tax and spend agenda. This continued last week, when Chancellor of the Exchequer Rachel Reeves unveiled £26 billion in mostly stealth fiscal drag tax hikes while earmarking billions more for welfare programmes and money to migrants.
However, cracks began to emerge in the government’s narrative when the Office for Budget Responsibility (OBR) revealed late last week that the alleged black hole in Britain’s finances, which was initially sparked by £16 billion in downgrades to the country’s productivity performance (the amount of goods or services produced per hour or work), had been offset by stronger revenues through taxation.
Furthermore, the OBR said that it had told Reeves that this was the case as early as September and that by October, the government was running a projected surplus of £4 billion. Yet, rather than acting on or revealing this development, the government decided to withhold the information from the public, in an apparent bid to justify their high spending agenda, which in turn could serve to shore up support for his embattled government with left-wing lawmakers.
Amid growing calls for the resignation of his Treasury chief for apparently falsely telling the public on November 4th that the productivity downgrade had “consequences for the public finances”, Starmer maintained that Reeves did not lie to the public.
“There was no misleading,” he said per The Times, adding that the government had even considered breaking its manifesto pledge to not raise income taxes to deal with the supposed budget shortfalls. However, Starmer did not specifically address Reeves’ statement to the public. He further claimed that the tax hikes announced last week were necessary to provide the government with fiscal “headroom” should another international shock come about, however, this differed from the excuse given by Reeves.
Sensing the political headwinds of public anger over being taxed for welfare handouts, much of which will be put in the pockets of illegals and other migrants, Starmer used his address on Monday to claim that he will seek to reform the welfare system. Despite his budget putting Britain on pace to spend a projected £400 billion in pensions and welfare by the end of the decade, Starmer said that welfare has “trapped people in poverty” and “wrote young people off as too ill to work”.
His newfound sense of fiscal responsibility notwithstanding, the knives appear to be out for Reeves and in turn for Starmer’s entire government. Indeed, on Monday, the leftist First Minister of Scotland John Swinney added his name to the list of major politicians calling for Reeves to resign for having misled the markets and the public.
Meanwhile, Reform UK leader Nigel Farage, who has called for an investigation into the Chancellor and for her to resign, said that in the name of raining taxes, “there is no doubt now that Rachel Reeves did deliberately mislead the country, and by the looks of it, her own cabinet as well.”
Reform deputy Richard Tice added: “She’s presided over a complete and utter car crash, a number of car crashes in the run up to the Budget and the Budget itself. Confidence is shattered. I don’t know what delusional world the Prime Minister is living in with his speech today.”
For her part, Conservative Party leader Kemi Badenoch said that Reeves should resign for misleading the public, which she said led people to make financial decisions “based on the false briefings which Rachel Reeves put out.”
In an apparent effort to mollify the demand for a scalp, Richard Hughes resigned as chairman of the Office for Budget Responsibility (OBR) on Monday over the watchdog seemingly accidentally leaking the contents of the Autumn Budget last week shortly before they were announced by Reeves.
Yet, this was interpreted by some as an attempt to shift blame from the government over the budget chaos.
Tory leader Badenoch remarked on X: “The Chancellor is trying to use the Chair of the OBR as her human shield. But I will not let her. Why is it ALWAYS someone else’s fault with Starmer and Reeves?”
Nigel Farage said: “Whatever the failings of the OBR, they have not wilfully attempted to mislead the British public. The wrong person has resigned today, it should have been Rachel Reeves.
“I am now calling on Richard Hughes to release all his correspondence with the Chancellor in the run up to the budget so we can see exactly what she knew and who’s really to blame for this mess.”
