Rachel Reeves is facing the prospect of a sleaze probe for the second time in a month.
The Chancellor was reported to the ethics watchdog yesterday by Nigel Farage over false claims that there was a black hole in the public finances of more than £20billion.
It has since emerged that Ms Reeves had been told by the Office for Budget Responsibility that she actually had billions to spare.
The Reform UK leader said Ms Reeves’ conduct in the run-up to last week’s Budget was of ‘grave concern’.
He told the independent adviser on ministerial standards that her actions ‘plainly meet the threshold for investigation’. Ms Reeves also dragged Sir Keir Starmer further into the row yesterday by insisting he knew about the surplus and backed her approach. She called their relationship ‘a partnership’.
It is the latest scandal involving Ms Reeves after she was rebuked at the end of October for failing to get a licence for renting out her family home.
Last night Ms Reeves told Channel 4 News there was no need for an investigation into whether she misled the markets and taxpayers. But The Times reported that even some of her ministerial colleagues feel misled. A senior figure told the paper: ‘At no point were the Cabinet told about the reality of the OBR forecasts.’
Writing to the adviser, Sir Laurie Magnus, Mr Farage said voters faced ‘the heaviest tax burden in generations on the basis of what increasingly looks like a sustained misrepresentation of the true fiscal position’.
Chancellor Rachel Reeves (pictured speaking on Channel 4 News) is facing the prospect of a sleaze probe for the second time in a month on the back of her controversial Budget last week
The Chancellor was reported to the ethics watchdog on Sunday by Nigel Farage (pictured) over false claims that there was a black hole in the public finances of more than £20billion
He said Ms Reeves carried out a ‘sustained public and media campaign portraying the public finances as being in a state of collapse’ to lay the ground for a £30billion tax raid.
Mr Farage told Sir Laurie: ‘Treasury officials repeatedly briefed journalists about an alleged ‘black hole’ of £22billion and even £40billion, figures incompatible with OBR forecasts the Chancellor had seen. There is no indication she corrected those briefings or disassociated herself from them.’
The Chancellor appears to have broken the Ministerial Code, which requires her to ‘give accurate and truthful information to Parliament’ and ‘be as open as possible with Parliament and the public’, Mr Farage said.
She could also face a probe by the Financial Conduct Authority (FCA) after the Tories accused her of ‘possible market abuse’, causing volatility in the City with ‘briefings, leaks and spin from HM Treasury’. The Tories demanded Ms Reeves come to the Commons today to ‘explain the extent to which she misled the public’.
Alex Burghart, shadow Chancellor of the Duchy of Lancaster, told Sir Keir: ‘These briefings have affected not only the integrity of the fiscal process, but the rights of Members of Parliament and more importantly the lives of working people.’
Repeating her call for Ms Reeves to resign, Tory leader Kemi Badenoch told the BBC: ‘The Chancellor called an emergency Press conference… about how terrible the state of the finances were and now we have seen that the OBR had told her the complete opposite.’
David Morrison, senior market analyst at Trade Nation, told the Daily Mail: ‘The FCA should investigate.’
Andrew Sentence, former interest rate-setter at the Bank of England, told The Mail on Sunday that she was guilty of ‘duping us about her discussions with the OBR’.
Andy Haldane, former chief economist at the Bank of England, said an ‘inquiry into this Budget is needed, regulatory or Parliamentary’. However, in her first interviews since it emerged on Friday that the OBR revealed it had told her in October there was no black hole to fill at the Budget, Ms Reeves insisted she had done nothing wrong.
On Sky News, after she failed to answer whether she had lied, she shot back: ‘Of course I didn’t.’
In an interview with the BBC, when told she had ‘misled people in the run-up to the Budget’ she insisted: ‘No, I do not accept that at all.’
Asked if she was sure she would be able to carry on, Ms Reeves insisted: ‘Yes I am sure, and I am determined.’
