❓WHAT HAPPENED: British Chancellor of the Exchequer (Treasury Secretary) Rachel Reeves faced accusations of misleading the public about the state of the country’s finances ahead of her Budget announcement.
👤WHO WAS INVOLVED: Rachel Reeves, Prime Minister Sir Keir Starmer, the governing Labour Party, and Reform Party leader Nigel Farage.
📍WHEN & WHERE: The controversy unfolded following Reeves’s recent Budget announcement in the United Kingdom.
💬KEY QUOTE: “The British people are now facing the heaviest tax burden in generations on the basis of what increasingly looks like a sustained misrepresentation of the true fiscal position.” – Reform Party leader Nigel Farage
🎯IMPACT: Calls for investigations into Reeves’s conduct have been made, including letters to the Financial Conduct Authority (FCA) and the independent adviser on ministerial ethics.
British Chancellor of the Exchequer Rachel Reeves—roughly equivalent to U.S. Treasury Secretary—is facing calls to resign after apparently misleading the public about the state of the country’s finances in the lead-up to her Budget announcement, to justify punishing tax rises. The controversy stems from the British government briefing the press about a supposed £30 billion (~$40bn) “black hole” in the public finances that would have to be covered by tax rises.
It has emerged that the independent Office for Budget Responsibility (OBR) had informed Reeves that the public finances were in better condition than previously thought, and there was actually a £4.2bn (~$5.5bn) surplus. Reeves appears to have pushed the “black hole” narrative, regardless, as a cover for tax hikes that have been used to increase welfare spending, in particular child benefit payments—previously capped at two children—which will disproportionately benefit ethnic minority families in high-migration areas.
Reform Party leader Nigel Farage has called for an inquiry into whether Reeves broke the Ministerial Code, writing to Prime Minister Sir Keir Starmer‘s Independent Adviser on Ministerial Standards, Sir Laurie Magnus, to request a formal investigation. “The British people are now facing the heaviest tax burden in generations on the basis of what increasingly looks like a sustained misrepresentation of the true fiscal position,” he wrote, adding: “As you will also be aware, the Shadow Chancellor, Mel Stride MP, has written to the Chief Executive of the Financial Conduct Authority raising concerns about possible market abuse arising from the ‘repeated disclosure of market-sensitive details’. That regulatory inquiry and an investigation under your auspices serve different but complementary purposes; both are now plainly necessary.”
Image by Simon Dawson / No 10 Downing Street.
Join Pulse+ to comment below, and receive exclusive e-mail analyses.
_@_LHR,_Jan_2020.jpg){kind=link}
