Reeves must go for her Budget lies, say voters: Poll delivers damning verdict on Chancellor as No 10 admits that PM also knew there was no ‘black hole’

Rachel Reeves should resign as Chancellor for ‘lying’ about the country’s finances in the run-up to the tax-hike Benefits Street Budget, voters have declared.

The Mail on Sunday poll found a more than two-to-one majority in favor of his resignation after the financial watchdog revealed he told the Chancellor months ago that there was no gap in the public finances as he claimed.

The Prime Minister has also become embroiled in the growing political storm, as business leaders call for Ms Reeves’ chairmanship and Labor MPs concede the Chancellor’s days may be numbered.

Downing Street on Saturday night indicated Sir Keir Starmer was aware of the real situation, with Ms Reeves warning of ‘difficult choices’ amid reports of a £30bn ‘black hole’ in the country’s finances.

But on Friday the Office for Budget Responsibility (OBR) revealed that it had notified the Treasury weeks ago that there was actually a surplus of £4.2bn.

Asked whether Sir Keir was aware that the OBR had made it clear that the real economic picture was better than the one painted, a No 10 source said: ‘The Prime Minister and Chancellor worked together on the Budget, which made fair and necessary choices.’

In the MoS poll, 68 per cent of voters think Ms Reeves should resign, while 32 per cent think she should stay.

In other developments:

• Shadow Chancellor Mel Stride called for a full investigation from the Financial Conduct Authority ‘into possible market abuse by anyone with access to confidential information, including HM Treasury and 10 Downing Street’, on the grounds that markets could be manipulated by knowingly false statements;
• Ms Reeves refused to mislead the public and told The Guardian that although she knew the deficit had disappeared the tax raid was still ‘fair and necessary’ because the rich should share more of the economic ‘burden’;
• A Treasury secretary is said to have hinted Labor will take revenge on the OBR for announcing its specific advice to the Chancellor, claiming the Government has ‘big plans’ for the watchdog next year;
• Ms Reeves is likely to be forced to appear in the House of Commons on Monday to make an urgent statement on the issue, as ministers have admitted to the MoS that the situation looks ‘serious’ for the Government.

The MoS poll by Find Out Now also found that 65 per cent of voters think the Labor Government will fall before the end of its five-year term in 2029.

Meanwhile, visitors to the Daily Mail website on Saturday overwhelmingly called for Ms Reeves to resign, with 97 per cent of the 87,541 people who voted calling for her resignation.

And this doesn’t just apply to voters. Andrew Sentance, a former interest rate setter at the Bank of England, was among several senior economists who wanted him gone, and even Unite union boss Sharon Graham criticized his decision to hit ordinary working people with stealth taxes.

Business leaders have also called for Ms Reeves’ head, while Labor MPs concede the Chancellor’s days may be numbered

As the Conservatives launched a public petition calling for Ms Reeves to be sacked on Saturday night, UK Reform Leader Nigel Farage told the MoS: ‘We have a deceptive Prime Minister and Chancellor and both must go. ‘The business world has no trust in these two.’

On Friday the OBR revealed that it had written to the Treasury on September 17 estimating the black hole at £2.5bn rather than the £30bn claimed. And on 31 October the OBR told the Chancellor that it was above surplus and that the Government was on track to meet its fiscal targets.

But just four days later the Chancellor held an unusual press conference in which he spoke of the ‘challenges’ he faced ahead of the Budget and implied that Labor should not fulfill its manifesto promises not to increase income tax.

In Wednesday’s Budget, Ms Reeves announced a £30bn package of tax rises, the bulk of which will go towards benefit increases demanded by left-wing Labor MPs.

Conservative Party leader Kemi Badenoch said of Ms Reeves in an interview with the MoS: ‘She seems to think she can create her own alternative reality and people will buy it. This is what I meant when I said in my budget speech that you were fooling the public.

‘We have now learned that the OBR actually told him, ‘You don’t need to do this.’ And he did it anyway. This is fraud.

‘This is another example of this woman overstepping her boundaries and being in the wrong job.’

Even a Cabinet minister admitted on Saturday night that Ms Reeves was in a precarious position because her Labor colleagues had been forced to back the line that she was a financial black hole.

He told the MoS: ‘This is serious. The problem is that Labor MPs signed up to it.’

Downing Street said Sir Keir Starmer was aware of a £4.2bn surplus in the public finances despite Ms Reeves warning of ‘difficult choices’ amid reports of a £30bn ‘black hole’.

Other angry Labor MPs made clear the Chancellor’s position was hanging by a thread. Former Minister Graham Stringer said: ‘No Chancellor would expect to remain in office under similar circumstances. To do this, Rachel Reeves has a lot to do with MPs and the public.’

Amid expectations that Opposition MPs will demand the Chancellor answer questions in the Commons on Monday, Mr Stringer added: ‘If there is an urgent question on this, the Chancellor himself should come to the House; ‘He should not follow the path of cowards and send one of his subordinates instead.’

Another Labor MP expressed anger that Ms Reeves had ‘walked her colleagues to the top’ to advocate for the possibility of a manifesto-busting rise in income tax and rates (which were widely leaked ahead of the Budget) only to have the Chancellor abandon the plan.

The MP said: ‘Lied about financial black hole; The OBR said it didn’t exist.’

But the MP suggested Ms Reeves would survive the current crisis, but only because she would not be able to remain in office as Chancellor without becoming Prime Minister. He said: ‘If he goes, Keir goes.’

Therefore, it is likely that the Chancellor will remain in office until next year’s local elections. It is feared the results will be so bad for Labor that Sir Keir will be forced to resign.

There were suggestions on Saturday night that the Chancellor and the Treasury were drawing up plans to punish the OBR for releasing its forecasts and accidentally leaking the budget contents before Ms Reeves delivered the budget on Wednesday.

Sources claimed that the day after the Budget, Treasury Secretary Dan Tomlinson was heard responding to a question about the future of the independent body by saying: ‘Just wait – big plans for next year.’ On Saturday night the Treasury denied saying any such thing.

Conservative Party leader Kemi Badenoch told MoS that Ms Reeves was living in an ‘alternative reality’

Mr Sentance, the former economic director of the Confederation of British Industry, called on Ms Reeves to resign, saying: ‘As well as deceiving us about her discussions with the OBR, Ms Reeves has delivered one of the worst Budgets I can remember. Public expenditures, taxation and borrowing were increased instead of decreasing. Unless there is a serious change in government policies, we are heading towards a serious economic crisis.

‘If Ms Reeves cannot make the necessary U-turn, someone else must take responsibility.’

Ken Costa, City’s grandfather and former chairman of financial services group Lazard International, said: ‘The OBR letter caught up with Reeves. ‘This is an indictment of the OBR’s calculated intention to hide its important finding that there is no black hole in the public finances.’

A Treasury spokesman said: ‘This Government fully supports the independent OBR, whose impartial forecasts support stability, and the fair and necessary choices the Chancellor has made in the Budget. It is this Government that has imposed a strengthened fiscal lockdown after the previous government’s reckless disregard of OBR forecasts.’

Find Out Now surveyed 2,002 British adults on 29 November.