EMBATTLED Rachel Reeves has been accused of killing the high street by imposing a “stealth tax” in her brutal Budget.
The Chancellor is facing growing calls to resign amid claims she conned the country with a fake £30billion fiscal black hole to justify her tax hikes.
Pressure continues to mount on Ms Reeves, who spent weeks warning she had “tough decisions” to make due to a shock productivity downgrade.
But the OBR has since blown the story apart, revealing it told Ms Reeves in September the downgrade had been fully offset by soaring tax revenues.
By October 31, the watchdog said the black hole had vanished altogether — replaced by a £4.2billion surplus above her day-to-day spending plans.
Even so, Reeves unleashed a litany of tax hikes in her Budget, vowing to reduce inflation and “provide relief” for families.
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Speaking in the Commons on Wednesday, the Chancellor claimed her reform of business rates would introduce a “golden era for hospitality”.
But critics have accused her of delivering a “smoke and mirrors” Budget, with shops, pubs and restaurants set to face brutal tax rises.
Reeves vowed to introduce the “lowest tax rates” in more than forty years for over 750,000 hospitality, retail and leisure properties.
She announced new tiered system, with tax charges for businesses to vary depending on the size and value of its premises.
But as she announced the measure, a separate agency released a higher assessment of the value of the buildings used to calculate business rates.
This means, for the average high street business, the levy will actually increase significantly next year.
And a 40% discount on the rates, introduced for high street businesses during the pandemic to reduce their fiscal burden, will end in April.
Critics also noted Ms Reeves’ failure to mention this in her chaotic speech on Wednesday, which started with the OBR publishing her report early.
This, combined with her latest measures, could trigger a wave of shop closures across the country, it is claimed.
Emma McClarkin, head of the British Beer and Pub Association, slammed the Chancellor’s business rates reform.
She told The Times: “We were promised real rates reform but we got a budget of smoke and mirrors.”
It comes at the end of a Budget week that has already descended into disarray and seen her put skivers ahead of strivers.
Research shows that, since Labour came to power, benefit claimants and public sector staff have done much better than private sector workers.
The black hole backlash centres on a string of recent warnings given by Ms Reeves, including at a bizarre breakfast-time press conference.
Hosting a press conference at Downing Street on November 4, Ms Reeves hinted she would be forced to hike income tax.
She insisted working people would “all have to do our bit” after the Office for Budget Responsibility (OBR) downgraded productivity forecasts.
And speaking in a BBC interview on November 10, Ms Reeves doubled down on her claims and warned Brits of a “difficult” Budget.
She said: “The economic circumstances have declined, deteriorated since a year ago…
“As a result, we are having to look at taxes and spending. It’s got to be both of those things.
“The speech I made last week was about setting the context for the Budget, which is a difficult one.
“I think people can see that and they understand why this is a difficult Budget.”
Former Institute for Fiscal Studies chief Paul Johnson said he believed the November 4 press conference “probably was misleading”.
He added: “It was designed to confirm a narrative that there was a fiscal black hole that needed to be filled with significant tax rises.
“In fact, as she knew at the time, no such hole existed.”
Yesterday, Tory leader Kemi Badenoch slammed the latest revelations as “shameful” and called for Chancellor to be sacked.
The Leader of the Opposition said: “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.”
On November 13, Reeves abandoned her plans to raise income tax at the Budget, fearing it would spark major backlash.
Former minister and Tory member of the Treasury Select Committee John Glen also accused Mr Reeves of misleading the public.
He added: “The whole country will think: ‘what the hell is she doing’.
“She told the public she needed to make tough decisions to fill a gap in funding identified by the OBR. That was not true.
“She knew it was not true when she said it. It was all an elaborate ploy to try and excuse her decision to break her manifesto pledge on taxes.”
Ms Reeves insisted an eye-watering splurge on benefits funded by tax rises would not be her political “obituary”.
The Chancellor still pressed ahead with a £26billion tax raid.
She hauled almost a million more workers into the higher rate of income tax and scrapping the two-child benefit cap.
Sir Keir Starmer had previously insisted lifting the cap was unaffordable — but then came under acute pressure from his own MPs.
