Reeves in crosshairs for ‘lies’ about UK’s not-so-dire economy
If the duo manage to survive the mounting scandal from their frustrated Labour backbenchers, they also face further scrutiny from the PM’s ethics adviser who has been asked by Reform UK leader Nigel Farage to investigate “potentially serious breaches of the ministerial code”.
Reeves, 10 Downing Street and Treasury officials also face a financial probe from the Financial Conduct Authority as to why they were briefing the media about a £20bn to £30bn black hole when they had been officially informed by the Office of Budget Responsibility on several occasions that the economy was actually in surplus.
Reeves was to face a hostile reception in the Commons after Alex Burghart, the shadow chancellor of the Duchy of Lancaster, filed an urgent question accusing her of a “a serious breach of trust with parliament and the British people”.
Reeves had primed all of Britain for horror tax rises of more than £26bn, which she duly delivered, hammering the middle classes and homeowners and even raising the ire of the working class after lying about it for weeks and saying the economy was much worse than it was.
If anyone in the private sector had misled the financial markets like Reeves had they would be immediately investigated and sacked.
Starmer, who had oversight of Reeve’s actions, is also in the crosshairs.
At her emergency doom and gloom handwringing on November 7, Reeves said: “A less productive economy is one that produces less output per hour worked. That has consequences for working people – for their jobs and for their wages and it has consequences for the public finances too, in lower tax receipts.”
Three days later she told the BBC the only way she avoid tax rises, and not break the Labour manifesto, would be to inflict “deep cuts in capital spending”.
She painted a particularly dire picture where those with the broadest shoulders had to contribute more, a lot more.
One minister told The Times: “We had this hokey-cokey about income taxes going up and then not going up.”
Reeves had insisted that the Office for Budget Responsibility (OBR), which forecasts economic productivity, was about to downgrade growth.
But documents and a timeline released by the OBR show that they had told the Chancellor, on October 31, a week before her emergency press conference, that unexpected wage growth and tax receipts would cover than downgrade in productivity and the economy was £4.2bn in surplus, and not in deficit at all.
It also emerged that the OBR had updated Reeves even earlier, on September 17, that the public finances were in better shape than widely believed.
All of this showed Reeves was within her own self-imposed financial headroom of £15bn.
Reeves refused to answer the first two times she was asked on Sunday if she had lied to the public, but on the third attempt said: “Of course I didn’t lie.”
The problem is that Reeves and the prime minister now have zero credibility.
On Sunday night, shadow chancellor Mel Stride complained to the Financial Conduct Authority demanding an investigation into the behaviour of 10 Downing Street and Treasury officials because Reeves attempted to roll the pitch for her budget, which could constitute “market manipulation”.
He wrote: ”Confidential market sensitive information appears to have been spun, leaked and misused – and markets, businesses and families have paid the price.
“It seems increasingly clear that the Chancellor has been giving an inaccurate picture of the economic and fiscal context and this appears to be driven by political considerations.’’
In Reeve’s feared budget, she handed out £16bn of welfare, to the joy of her Labour backbenchers, but not of the British public, leading to an extraordinary situation where bread and butter Labour voters – those working families struggling with high cost of living – are now much worse off than benefits recipients.
The incentive to go to work has vanished, replaced by a financial imperative to have even more children and become totally wedded to the state.
The unions are furious. Workers are furious. Voters are furious.
Not surprisingly Reeves, who handed families not in work with more than two children a financial windfall at the expense of bracket creep and dozens of extra taxes on savings, dividends and pensions is now in the crosshairs of the entire taxpaying British public.
Reeves has a history of being economical with the truth – she had massaged her CV on LinkedIn saying she worked as an economist when she had been in “retail banking”, was wrong about the length of time she had been at the Bank of England and was subject to an expenses probe when she worked at the Halifax Bank of Scotland.
Tory leader Kemi Badenoch said Reeves should resign.
“The chancellor called an emergency press conference, telling everyone about how terrible the state of the finances were, and now we have seen that the OBR had told her the complete opposite,” Badenoch told the BBC.
“Because of that, I believe she should resign.”
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British Prime Minister Sir Keir Starmer and his Chancellor of the Exchequer Rachel Reeves were to face a grilling in the House of Commons on Monday after being accused of fabricating an economic emergency to the public, but also misleading their fellow cabinet ministers and parliament.