Rachel Reeves “Lied About £21 Billion Black Hole” After OBR Told Her Months Ago it Didn’t Exist
Rachel Reeves has been accused of “lying” to the public and markets to justify huge tax rises to pay for benefits after the OBR revealed she was told months ago that there was no ‘black hole’ in the public finances. The Mail has more.
The Chancellor delivered a series of extraordinary grim warnings about the state of the Government’s books in the run-up to the Budget.
She flagged that the Office for Budget Responsibility was downgrading productivity, as well as blaming everything from Brexit to Tory austerity and Donald Trump for a “worse than expected” outlook.
Ms Reeves even delivered a highly unusual ‘scene setter’ speech in Downing Street on November 4th hinting that she would have to breach Labour’s manifesto promises not to increase income tax.
And six days later she gave an interview to the BBC in which she insisted that the only way to balance the books without an income tax hike was to cut “capital spending” – something she made clear she was not willing to do.
However, a bombshell letter from the OBR to the Treasury committee has now laid bare that Ms Reeves has known since September that revisions to tax revenues had almost completely offset a £21 billion productivity downgrade.
By October 31st the watchdog said it had informed Ms Reeves that she was in fact meeting both her fiscal rules without the need for any action – giving her more than £4 billion in headroom.
In the event the Chancellor announced an eye-watering £30 billion package of tax rises on Wednesday, a large chunk of which went on benefits rises that had been demanded by mutinous Labour MPs.
She had already U-turned on the hints of income tax rises – if they were ever seriously considered – but only after the fact they were not happening was leaked to the Financial Times.
The dramatic revelation sparked fury, with the Chancellor accused of “deliberately misleading” the public and markets. …
Tory leader Kemi Badenoch posted on X: “Yet more evidence, as if we needed it, that the Chancellor must be sacked.
“For months Reeves has lied to the public to justify record tax hikes to pay for more welfare.
“Her Budget wasn’t about stability. It was about politics: bribing Labour MPs to save her own skin. Shameful.”
Tory frontbencher Neil O’Brien said: “She lied so that she could produce ‘better than expected’ numbers and say rates were not going up as a budget ‘rabbit’.”
Worth reading in full.
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I did consider it strange that the black hole, which no-one from OBR, ONS, or Treasury had noticed, was picked out by Reeves after nano-seconds as Chancellor, and the sum appeared to be exactly the same as she spaffed away in unjustified pay increase in the first ten minutes in government.
I remember politicians resigning when they got caught lying to Parliament or the people. Any chance of reviving a tradition.?
I know F all about the finer points of economics.
But I do know that “Tory frontbencher Neil O’Brien ” is sadly lacking in all matters medical. He for one traduced the likes of Heneghen and Jefferson, TTE.
Even worse he wrote an opinion piece for The Guardian!
https://www.theguardian.com/commentisfree/2021/jan/17/id-love-to-ignore-covid-sceptics-and-their-tall-tales-but-they-make-a-splash-and-have-no-shame
Never ever trust or forgive morons like him – with anything remotely important.
Well spotted.
That’s more than good enough for me.
I’m sick of hearing about Rachel Reeves’ supermassive black hole, but surely this now spells the end of the road for her, as well as Starmer. Because surely this here is a crime, right? Honestly, she’s starting to remind me of Jason in the Friday The 13th movies. Just when you think: ”This is it, she’s outta here!”, plot twist…aaand she’s still here. Like a horror movie villain she just won’t go down and stay down. But have you noticed in politics, as well as other high profile jobs, people are never sacked, are they? They ‘resign’ or ‘step down’. I think Angela Rayner was sacked in private but her PR was all about her ‘resignation’. Hancockroach was another one. Nowt to do with the Midazolam/Morphine death cocktail, though. It was the non-socially distanced, extra-marital wandering hands what done it. Me or you would totally get the sack in our regular jobs if we cocked things up so stupendously, but I’ll eat my hat collection if Reeves gets the sack. They ‘resign’ because there’s a stigma attached to getting fired and these people have revolving doors whereby they can just go walk into another cushy, well-paid position. Regular folk would… Read more »
I never had you down for a collector of hats Mogs.😃😃😃
Rachel from Accounts has already walked from a job before Halifax sacked her due to not turning up for work but playing councillor.
Spot on observation – Stepping down / resigning / choosing to spend more time with the family etc are all terms used instead of ‘sacked’, especially the more senior people are. The key intent being to make it look like it was their choice…even if it wasn’t!
‘sacked’ makes walking into a consulting / UN / quango job a bit harder after 12 months, whereas all the others are fine, come and get on the gravy train
Hope everyone who voted Labour is happy because what they have done is exactly what anyone with half a brain expected them to do – tax, spend, lie.
Politicians telling lies? Never.
Scandalous!
Achieving a better outcome if you come to work and don’t do anything really says it all
Your correspondents seem to be confused about the reasons for Labour government policy. The objective is not to balance the budget but instead to spend as much as possible on their preferred people and tax those with some money as much as possible.
High tax from Labour is not an unfortunate side effect. It is a welcome achievement to them.
Labour are Liars, Starmer is a Liar, Reeves is a Liar, Khan is a Liar, Lammy is a Liar.
They lied in the Manifesto, they lie to us whenever they open their mouths, they cannot be trusted. I believe they are now so sunk in lies they no longer know what the truth is, that is if any of them ever did.
This rather lays bare the clear intentions to destroy the country.
Crash and burn, like Sunak
A scorched earth policy laid bare. Whoever gets in next election, the country will already have crossed the event horizon, making escape from the economic black hole impossible.
I am increasingly terrified. Why do this group of useless misfits feel so comfortable lying to us every time they open their mouths? Why over the last few years has Starmer been allowed to get away with the ‘never crossed my desk so I don’t know about it ‘, why were they so easily able to pass off the curry night? Why do they not seem to fear the judgement of the electorate for their lies, their incompetence, their subservience to foreigners? This is my reason for being terrified, they don’t fear our judgement because they have a scheme not to face the electorate. They bench tested it this year with the cancellation of the local elections, apparently more are due for cancellation next year. Do we really think the Tories will want a general election that sees them with less than twenty seats? Of course not, they will rubber stamp the cancellation, as they did with the locals, so they can hold on to the seats they’ve got. It isn’t looking good.
“There is a huge black hole at the centre of the Milky Way Galaxy. This was inherited from the previous government, was exacerbated by Brexit and Austerity and this government is committed to reducing the size of the black hole within the term of this Parliament”
And just like an astronomical one, an economic black hole gets bigger the more stuff falls into it.
Two-Tier is the First Lord of the Treasury.
She would not have done this without his knowledge and approval.
They are both culpable: they both did it to try and stave off a backbench revolt.
They are both serial liars and the most disgraceful duo to ever hold the position of PM and Chancellor.
The only silver lining is that this will probably permanently destroy the Labour Party.
How she is still in office is beyond me, but then she’s spent her whole life, lying in one way or another.
I’m at a loss to square this particular circle. For months now, the government has been forced to borrow more than it predicted on the financial markets, suggesting that their “black-hole” is indeed real, yet the OBR has given a surprisingly generous review of the economy.
I actually ran this issue through Grok to see if I’d missed anything, and its response was that the OBR continues to accept the government’s predictions that productivity growth and the impact of various future trade deals will improve the government’s finances despite widespread evidence to the contrary.
In its summary, Grok suggests we watch out for December’s data… “In short, the black hole was real at handover (£22 billion), but 2025’s data shows it’s stretched wider by a mix of legacy drag and policy choices—larger than March reports implied, but not (yet) spiraling out of control per the latest OBR path. If you’re tracking this, watch December’s ONS revisions and Q4 GDP for the next clues.”
I’m really puzzled by this story because, for as long as I can remember, this government has been exceeding its forecasts for the amount of money that it needs to borrow, suggesting there is indeed a “financial black-hole”.
I asked Grok to explain why the OBR seems to feel that the finances are under control, and its answer was that the OBR has taken the government’s predictions for future productivity growth and the impact of various trade deals and has used these figures to suggest that everything will eventually work out well.
Anyone endowed with half a functioning brain cell should know that government forcasts for productivity are about as reliable as Neil Ferguson’s pandemic models, and Grok suggested we should wait for December’s economic data and any consequent corrections that need to be made before qaccepting the OBRs rosy outlook…
People don’t get it.
Labour = Marxist-Socialism: their objective is to redistribute wealth from the rich to their welfare-dependent voting stock and union cronies.
That can only be done by taxation
The only black hole is beneath her nose.