Chancellor’s position is untenable following black hole controversy, says Sir Mel Stride

SHADOW Chancellor Sir Mel Stride has said that Rachel Reeves should resign following the row over whether there is a black hole in the public finances.

He also said that some of the extra spending announced in the Budget should go towards tackling the backlog in the courts system as an alternative to abolishing jury trials.

Sir Mel told GB News: “The Chancellor should resign. Now, Richard Hughes’s departure, one can understand in terms of the serious errors that were made at the OBR, but nonetheless, I think there’s more than circumstantial evidence that the relationship between him and Rachel Reeves, and the lack of support from the Chancellor for him at this particular moment, has been part of the story of him leaving his position.

“The real story here, not to get distracted too much by the OBR, is that, of course, the Chancellor called that press conference on the fourth of November, stood up and told the public that there was a huge, great black hole in the public finances, and we now know thanks to Richard Hughes and the information that he brought forward into the public domain on Friday, that that simply was not true, that in fact, the previous forecast that the OBR provided on the 31st of October had shown that actually she was in a surplus against her fiscal target.

“So it was a complete misrepresentation of the true position, and also divulging various elements, actually, of market sensitive information in a way that should not have happened given that the conversations and interactions between the OBR and the Treasury and others should be strictly confidential. So I think the Chancellor’s position herself here is now untenable.”

Asked if she has broken the ministerial code, he said: “Well, that would be a matter for Laurie Magnus to decide whether he thinks an investigation and inquiry into that is appropriate, but I have written to the Financial Conduct Authority on this whole issue of market abuse and market manipulation, because we are looking at a situation where, on the face of it, it appears that the Chancellor, as I was saying, has stood up and misrepresented the situation regarding the public finances that is dealing in the area of market sensitive information.

“I think there should now be an inquiry, an investigation by the Financial Conduct Authority into what has happened here.”

On the Bank of England’s stability report, he said: “The position with the public finances is very weak, and much weaker than it should have been, because you’ve had a government that’s come in having said they wouldn’t put up taxes, but slapped lots of taxes, particularly on businesses.

“That has killed growth. And all the forecasts that we’ve had from the OBR and the recent report are that growth in subsequent years is going to be down on where they thought it was going to be. Back in the spring, they talked down the economy, if you remember, with this fictitious £22 billion black hole that extinguished the animal spirits in the economy, they borrowed and spent a lot of money, which has stoked inflation. That’s kept interest rates higher for longer.

“They’re mounding up lots of debt, and the servicing costs on that debt are now running at £100 billion, or twice what we spend on defence. And what we’ve seen this latest Budget is actually…taking a lot of money now from hard working people by way of extra tax and spending it on welfare.

“Those are the wrong priorities, and they’re not going to be good for the economic health or the well-being of people up and down the country, I’m afraid.”

On the abolition of jury trials, Sir Mel said: “I think to dismiss the centuries long situation where we’ve had jury trials as hanging on to tradition is a little bit perverse. I think it’s a very, very important element of maintaining confidence in our judicial system.

“There is an alternative to what he’s doing, and that is to not be spending an extra £16 billion on benefits for people who are not in work, but actually putting perhaps some of that resource into speeding up and extending the period over which courts sit so we can get through this backlog. It’s the wrong choice.”