Rachel Reeves’ Chief Secretary to the Treasury has insisted the Chancellor did not lie about the “black hole” in the public finances.
Sitting down with Camilla Tominey on GB News, James Murray adamantly defended Ms Reeves after she had become laden with accusations of misleading the public.
Ahead of the Budget, dire warnings had been thrown around the Chancellor could face as much as a £20billion “black hole”.
But the Chancellor has been accused of lying to Parliament as well as the general public after the Office for Budget Responsibility (OBR) indicated prevailing economic winds meant the gap would be much smaller than she had been initially warning.
No10 later dismissed claims the Chancellor misled the public when she warned of difficult decisions required to fill the black hole in the public finances.
Delivering a scathing recap of the past five days in Westminster, Camilla laid out: “We’ve got a Chancellor who lied in her CV.
“We then got a Chancellor who lied in the manifesto saying that taxes wouldn’t go up. Taxes have gone up.
“We then had a lie that they wouldn’t be imposed on working people. Now she’s been revealed to have lied about the reason for putting tax up.
James Murray argued that the Chancellor was taking steps to ensure there was sufficient fiscal headroom
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“So it was a complete and utter deceit, not just of Parliament, not just of the markets, but of the general public in claiming that you had to put taxes up because you had this black hole that didn’t actually exist.
“There was no black hole because the OBR had turned round to the Chancellor on October 31 and said, actually, you’re more than £4billion in surplus. Why did she lie about the existence of a black hole?”
Adamantly rejecting Camilla’s accusations, Mr Murray insisted: “She didn’t. I reject your claims.”
“Firstly, the OBR set out clearly that there had been a productivity downgrade of £16billion.
James Murray further insisted that adequate headroom is ‘critical’ to reducing borrowing cost and mortgage costs
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“And going into the Budget process, we also knew we wanted to get headroom up, and that headroom is critical to helping to get the cost of Government borrowing and to getting mortgages down.
“So we went into the Budget with those priorities, and the Chancellor set them out.
“She set out in her speech in early November that we needed more headroom, that everyone was going to be asked to make a contribution, and that our priorities in the Budget would be to cut the cost of living, cut NHS waiting lists, and cut that Government borrowing.”
Camilla argued Ms Reeves could have made it clear that she wanted to increase the fiscal headroom, which would require higher taxes.
“But she didn’t say that. So she’s lied to the public. She’s lied to Parliament and she has misled the market. It’s a very serious offence,” the GB News presenter warned.
On Saturday night, it came to light Prime Minister Sir Keir Starmer was also aware there was no “black hole” in the British public purse yet went on to sign off a speech where Ms Reeves is believed to have misled Britons.
In the speech, which Downing Street confirmed Sir Keir was happy with, Ms Reeves warned poor productivity would have “consequences for the public finances” while families would need to “do their bit” to plug the gap.
But a few days earlier, the Office for Budget Responsibility had told her the black hole had disappeared – and had, in fact, been replaced by a £4.2billion surplus.