Finally, a resignation over the Budget which saw £26bn of tax rises paired with a £16bn increase in welfare spending. The highest tax burden as a proportion of GDP since British records began – all for a black hole in the public finances that didn’t actually exist and which even Rachel Reeves’ own cabinet colleagues were annoyed and briefing the media about. But before you get too excited …
No, it is not the woman who presided over this mishandled, misleading Budget. “Asking” us to pay more in taxes, like we have a choice in the matter when she was the one that had the choice, and then complaining about feeling “uncomfortable” with the responses, including that of the Leader of the Opposition Kemi Badenoch when she branded the Chancellor “spineless, shameless and completely aimless”, adding: “People out there aren’t complaining because she’s female, they’re complaining because she is utterly incompetent.”
Instead, it is the chair of the budget watchdog, the Office for Budget Responsibility (OBR), Richard Hughes who has so far taken the bullet over the fiscal fiasco. This is not to say that the accidental early OBR publication of the Budget was not astonishing (it was), but Hughes is now rightly paying for a major administrative error, while the person who wilfully created a Budget shambles remains in post as Chancellor.
His resignation came after a swift investigation found sharp market movements caused by the security oversight – the “worst failure in the 15-year history of the OBR”. So an investigation launched, a resignation followed, all after an accidental leak of the Budget 45 minutes ahead of schedule.
But what of the politicians who drip drip drip leaked from the Budget weeks before, leading to accusations that Reeves manipulated both public expectations and the markets to pave the way for higher taxation? Why should there be no investigation into that? The Prime Minister and Rachel Reeves continue to claim it is unnecessary. I’m sure they think so.
The breaking of promises and the misleading of the public surely warrants its own investigation. You might say Reeves has been economical with the truth, but are we sure she could be economical about anything?
As Badenoch put it last night: “If leaks are a resignation matter, then the chancellor should be at the front of the queue to resign. She has been leaking her budget throughout the summer.”
If Labour imagines Hughes’ resignation will sufficiently draw attention from the Chancellor, they are likely to be disappointed. The Financial Times last night was even reporting one Reeves ally cheered: “I expect you’ll be writing about something else tomorrow.” Sure, Hughes stepping down means he will not appear at the Treasury Select Committee today to answer questions and reveal more on the Chancellor’s misleading economics. But other representatives of the OBR will still be there – and, if anything, Hughes’ resignation will only further add pressure on Reeves’ precarious situation.
He took responsibility for the premature publication and stood down. This only sheds more light on the fact that even while Reeves’ own colleagues accuse her Treasury of creating a misleading impression of the public finances in the weeks ahead of the budget, no one has faced the consequences.
And now it is being reported that the OBR chair was “forced out” by the Treasury after he contradicted the Chancellor’s claims over the size of the fiscal black hole. That is the chair of what is meant to be the politically independent Budget watchdog being knocked out of the way because of Labour’s political choices.
While the Tories have been on top of Labour’s fiscal woes since they entered government, and are now leading the way in keeping the spotlight on Reeves, Reform UK’s leader Nigel Farage has decided to circle back and launch a new wave of attack on Badenoch, urging voters not to trust the party, having previously overseen tax rises, increased welfare spending and net zero rules.
He has got three former Tory MPs to defect in the tide, including Jonathan Gullis, Lia Nici and Chris Green. But with each name, while there is a modicum of sadness from their old parliamentary colleagues (especially for Gullis, a former party deputy chairman), their prioritisation of the politics of convenience rather than conviction shines through. Just look back to previous comments about possible defections, including from Gullis on PoliticsLive: “Absolutely not a cats hell in chance will I be defecting… for me it takes courage of conviction and belief to stay within something like a political party where you have very different views within that and fight for what you believe in.” What happened? He has now joined a party where its former leader, now MP, Richard Tice posted last year on X: “With a special Easter message to Tory MP Jonathan Gullis: Given the multiple bits of embarrassing personal information we have on you, I suggest you pipe down on your attacks against me.”
The arguments that Gullis makes for leaving – “from failing to control both legal and illegal migration to pursuing a net zero agenda” – and Farage trys to convince others of, have been a policy focus in Badenoch’s Tory world. With stronger rules on ILR, a new ‘golden rule’ to cut taxes with a marked £47bn cut in state spending, including £23bn of welfare – and net zero being one of the first issues tackled under the new leadership.
But there is a reason that attacks from Farage are coming after the Tories’ renewed focus on the economy, because it is their best platform. Badenoch should keep pushing on it and only go further in delivering a distinct offering for voters, especially those looking for aspiration. It is a form of positive politics, and one that can both get voters back but earn the party new supporters.
The post Is it all OBR now for the Chancellor? appeared first on Conservative Home.
