Chancellor Reeves still peddling the fiction on TV this morning that tax rises in last October’s Budget were forced on her by the £22bn Tory ‘black hole’ in nation’s accounts. Let’s deal with that once and for all before Wednesday’s Spring Statement.
Let’s accept, just this once, the ‘black hole’ even if, contrary to her claims on Sky News today, the OBR has never acknowledged its existence.
She taxed and borrowed by far more than necessary to fill in the alleged black hole — because she wanted to increase public spending, which she did by £70bn.
She financed this by £40bn more in taxes and £30bn more in borrowing.
She did not have to do anything like that to fill in her black hole.
But by doing what she did she lost the confidence of consumers, business and investors.
This has slowed the economy to a crawl and created a new black hole of her own making. Which she will attempt to fill in with spending cuts on Wednesday and, no doubt, more tax rises come next April’s Budget.