Chancellor Rachel Reeves is under fire again, with the prospect of a second sleaze investigation in as many weeks.
Nigel Farage has reported her to the ethics watchdog over claims that she exaggerated a £20 billion “black hole” in public finances ahead of last week’s Budget.
Farage alleges that Reeves knew the Office for Budget Responsibility (OBR) had actually confirmed there were billions to spare, calling her conduct “of grave concern” and suggesting it clearly meets the threshold for investigation.
Starmer Drawn Into the Controversy
Reeves has pulled Prime Minister Sir Keir Starmer further into the row, insisting he was aware of the surplus and supported her approach.
She described their relationship as “a partnership,” linking the two of them politically as the fallout continues.
The controversy follows an earlier scandal in October, when Reeves was reprimanded for failing to obtain a licence for renting out her family home.
Cabinet Colleagues Question Transparency
Even some of Reeves’ own ministers appear unsettled.
A senior figure told The Times that at no point was the Cabinet fully briefed on the OBR’s forecasts, leaving colleagues in the dark about the true state of the public finances.
Farage’s letter to the independent adviser on ministerial standards, Sir Laurie Magnus, argues that voters are now facing “the heaviest tax burden in generations” due to what he calls a “sustained misrepresentation” of the country’s finances.
Allegations of Misleading the Public
According to Farage, Treasury officials repeatedly briefed journalists on an alleged “black hole” of £22 billion or even £40 billion—figures that did not match OBR assessments.
He added that there is no evidence Reeves corrected these briefings or distanced herself from them.
Farage claims the Chancellor may have breached the Ministerial Code, which requires ministers to provide accurate information to Parliament and be as open as possible with the public.
Possible FCA Investigation and Market Concerns
Reeves could also face scrutiny from the Financial Conduct Authority (FCA), with Tory MPs alleging potential market abuse.
Officials warn that “briefings, leaks and spin” from HM Treasury may have caused volatility in the City.
Tory leader Kemi Badenoch echoed calls for resignation, stating: “The Chancellor called an emergency press conference about how terrible the finances were and now we see the OBR had told her the complete opposite.”
Expert Voices Demand Accountability
Former Bank of England officials have weighed in.
David Morrison, a senior market analyst at Trade Nation, said the FCA should investigate.
Andrew Sentance, a former interest rate setter, accused Reeves of “duping us” regarding her discussions with the OBR.
Andy Haldane, ex-chief economist at the Bank of England, called for a formal inquiry, whether regulatory or parliamentary.
Chancellor Insists She Did Nothing Wrong
Despite mounting criticism, Reeves has defended herself in her first interviews since the controversy emerged.
On Sky News, when asked directly if she had lied, she responded: “Of course I didn’t.”
On the BBC, she rejected suggestions that she misled the public, saying, “No, I do not accept that at all.”
When questioned about her ability to continue in office, she insisted, “Yes I am sure, and I am determined.”
A Political Storm Brewing
With allegations of misleading the public, possible breaches of the Ministerial Code, and calls for an FCA investigation, Reeves finds herself at the centre of one of the most serious political crises of her tenure.
As the probe unfolds, questions remain about the Chancellor’s credibility and the extent to which her actions may impact both the Labour leadership and public trust in government finances.
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