PRESSURE on Rachel Reeves grew last night as she was accused of conning the country with a fake £30billion fiscal black hole to justify her tax raid.
Further calls for the Chancellor to resign came at the end of a Budget week that had already descended into chaos and seen her put skivers ahead of strivers.
Meanwhile research showed that since Labour came to power benefit claimants and public sector staff have done much better than private sector workers.
The “black hole” fury centres on a string of recent warnings given by Ms Reeves, including at a bizarre breakfast-time press conference earlier this month.
The Chancellor repeatedly told the public that “tough decisions” lie ahead because of a supposed new hole in the public finances.
In particular, she said the Office for Budget Responsibility watchdog was going to downgrade its assessment of how productive UK workers are.
But a letter published on Friday by the OBR revealed it told the Treasury on September 17 the gap was just £2.5billion.
And 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.
She has deliberately crashed the economy and must now consider her position
Richard Tice
Four days later, Ms Reeves gave a Downing Street speech claiming poor productivity would have “consequences for the public finances”.
She warned that families would have to “do their bit”.
Yesterday Tory leader Kemi Badenoch 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.”
Reform UK also piled in, with deputy leader Richard Tice accusing Ms Reeves of “deliberately scaring businesses, consumers and the markets” in the run-up to the Budget.
He fumed: “She has deliberately crashed the economy and must now consider her position.”
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.”
Downing Street yesterday denied Ms Reeves misled anyone, insisting the Chancellor had “set out her decisions clearly” at the Budget.
But No10 refused to explain why she continued to warn of a gap of £20-£30billion after the OBR told her the crisis had subsided.
For months Reeves has lied to the public to justify record tax hikes to pay for more welfare
Kemi Badenoch
Ms Reeves pressed ahead with a £26billion tax raid, hauling 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.
Separately, figures from stockbroker Peel Hunt showed public sector pay has grown at more than twice the pace of private firms.
They also showed benefits spending surged ten per cent, while pay outside the public sector rose little more than five per cent between June last year and September.
On the BBC’s Political Thinking podcast, Ms Badenoch described the Chancellor’s Budget as “un-Christian”.
Channelling St Paul’s advice to Timothy, the Tory leader said the “responsibility and dignity of work” was central to Christianity.
She added: “In early Christian times there was no state or welfare so I think that you can argue that.
“The Christian tradition is about communities and families and charity, not about compulsory taxation in order to pay welfare.
“What we saw with Rachel Reeves’s Budget was a lot of people dragged into paying income tax, subsidising others who are now on benefits. We need a party that still talks about personal responsibility.”
The Budget saw the “squeezed middle” targeted to fund measures for benefit recipients, including scrapping the two-child cap.
The clear preference under Labour is a bloated public sector and welfare recipients. Hard-working people who pay for this come a distant third
Andrew Griffith
It means an an extra £16billion is being poured into welfare.
And by 2030, disability benefits for working aged Brits as a share of national income will have nearly doubled.
Before the pandemic, about £11billion was spent on the benefits.
The Office for Budget Responsibility forecasts this will rise to £34billion.
Shadow Business Secretary Andrew Griffith said: “The clear preference under Labour is a bloated public sector and welfare recipients. Hard-working people who pay for this come a distant third.”
The Treasury insisted: “We are not going to get into the OBR’s processes or speculate on how that relates to the internal decision making.
“The Chancellor made her choices to cut the cost of living, cut hospital waiting lists and double headroom to cut the cost of our debt.
“It’s important to preserve a private space for Treasury–OBR policy and forecast discussions, so we welcome the OBR’s confirmation that this will not become usual practice.”
