David Vance SubstackRead More
It really is quite startling when we see that we are ruled by liarS. Let’s talk about Chancellor Rachel Reeves for a minute, shall we? It appears that she and her minions were lying to us about that infamous “£20bn black hole”, as confirmed by the OBR no less!
Of course Downing Street insists that Reeves did not mislead the public about the state of the public finances. Yet the sequence of events around the OBR forecasts raises some very serious questions about her honesty, judgment and respect for the British public.
Before her Budget, Reeves repeatedly highlighted only one part of the OBR’s evolving outlook: a downgrade in forecast productivity that, she claimed, made it much harder to meet her own fiscal rules. She used this message to talk about tight constraints, painful choices and the need for “difficult decisions” on tax and spending. The clear impression was that the numbers had suddenly deteriorated and that her hands were tied.
However, the OBR’s chairman, Richard Hughes, has now revealed in a letter to MPs that Reeves knew far more than she chose to admit. He wrote that on 17 September he informed the chancellor that the public finances were in better condition than many had assumed, not worse!!
He also confirmed that by 31 October the OBR had told the Treasury that Reeves was still on course to meet her key rule of not borrowing for day‑to‑day spending, with a margin of plus £4.2bn. That was smaller than the £9.9bn cushion she had last year, but it was still a clear buffer. No need to tax increases.
Despite this, Reeves went to Downing Street on 4 November and delivered a pre‑Budget speech focused almost entirely on weaker productivity and “lower tax receipts”. She repeated that message on the BBC on 10 November, warning that sticking to Labour’s manifesto would mean “deep cuts in capital spending”. She did not tell the public that the OBR expected higher wages to raise tax revenues and offset much of the productivity hit. Nor did she say that, taken together, the new forecasts still left her with enough headroom to meet both of her fiscal rules.
The OBR has now confirmed precisely that: yes, productivity was downgraded, but this was balanced by stronger wage growth, which boosts the tax take. In other words, Reeves chose to emphasise the gloom and hide the more reassuring parts of the same forecast.
Conservative Leader Kemi Badenoch has accused Reeves of lying and demanded her sacking. Whether or not that happens, and I doubt it, this episode shows we have a chancellor who prefers manipulating expectations to telling the whole truth. A Chancellor who cherry‑picks data to justify higher taxes is not being straight with the public. Reeves now has a serious credibility problem of her own making. Had she any integrity she would resign!
