Rachel Reeves found herself under intense fire today after a newly revealed letter from the Office for Budget Responsibility suggested she had been aware for months that the nation’s finances were not in the dire shape she had publicly warned about.
For weeks leading up to the Budget, the Chancellor painted a bleak picture of tumbling productivity, weakening revenues, and global headwinds.
She repeatedly hinted that tough decisions—including tax rises—were looming.
But according to the OBR, Reeves knew as early as September that upgraded tax forecasts had nearly wiped out the feared £20billion productivity downgrade.
Grim Briefings and Stark Predictions
Before the Budget landed, Reeves delivered a rare and dramatic speech from Downing Street on November 4, telling the country that Britain’s productivity outlook was deteriorating and presenting it as a major threat to both wages and the public purse.
She warned that lower output per hour meant lower tax receipts and put forward the idea—carefully but deliberately—that Labour might be pushed into breaching its manifesto by raising income tax.
A few days later, she told BBC Radio 5 Live that sticking to Labour’s promises would only be possible if she slashed capital spending, something she insisted she refused to do.
The OBR’s Letter Puts a New Timeline on the Table
A letter sent by OBR chair Richard Hughes to the Treasury Select Committee has dramatically shifted the narrative.
The watchdog says Reeves was told in mid-September that new tax revenue estimates had offset most of the productivity downgrade.
By October 31, she was formally informed that her fiscal rules were being met—and that she had £4.2billion in headroom on the public balance target and more than £11billion on the debt target.
In other words, she didn’t need to take corrective action. No dramatic measures.
No tax hikes to “balance the books.” The numbers were already on her side.
And Yet, a £30 Billion Tax Package Appeared
Despite the relatively comfortable fiscal position described by the OBR, Reeves still announced a sweeping £30billion collection of tax increases on Wednesday—much of which will go toward boosting benefits after pressure from Labour MPs.
Her earlier hints at income tax rises never materialized, raising eyebrows even further when news leaked that such increases had been taken off the table.
Fury From the Opposition and Accusations of Misleading the Public
Predictably, the political reaction was volcanic.
Conservatives accused the Chancellor of “deliberately misleading” the public, the markets, and even her own supporters.
Tory leader Kemi Badenoch took to X to claim Reeves had “lied to the public to justify record tax hikes,” calling the Budget “shameful.”
Tory MP Neil O’Brien added that she had manipulated expectations so she could unveil “better than expected” numbers as a political stunt.
Downing Street Pushes Back Against the Claims
No10 dismissed the accusations outright.
A spokesperson insisted Reeves had been transparent about the country’s challenges and had explained her decisions clearly during the Budget delivery.
Pressed directly on why Reeves warned of shortfalls long after being told they’d been offset, the spokesperson refused to accept any suggestion that she had misled either voters or the markets.
Inside the OBR’s Breakdown of Events
The OBR provided detailed insight into how the numbers evolved over several forecasting rounds.
Its early projections incorporated weaker productivity but also rising wages and inflation, which in turn boosted tax receipts.
Reeves was told all this months before the Budget was unveiled.
Although some spending pressures lingered—leaving the government narrowly missing a couple of interim targets—the crucial final pre-Budget forecast delivered to Reeves on October 31 confirmed both fiscal rules were comfortably met.
A Budget With High Stakes and Higher Drama
The story has reignited debate over transparency, trust, and economic messaging.
Whether Reeves overplayed the gloom intentionally or simply reacted to fast-moving data remains the central argument.
But what’s clear is that the political temperature around the Chancellor has soared—and the fallout from this revelation is unlikely to cool anytime soon.
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