Somewhere between the Treasury spreadsheet and the Downing Street podium, a black hole appeared in the UK’s public finances. At least, that is what the chancellor Rachel Reeves and prime minister Keir Starmer spent weeks hinting at before the 2025 Budget: a looming fiscal gap, hard choices, and the sense that the money simply was not there.
Then the Office for Budget Responsibility (OBR) released its side of the story, and things got awkward.
The black hole that was actually a surplus
In a letter published by the OBR, chair Richard Hughes set out the forecasts his team had given Reeves in the ten weeks before the Budget. The key detail that by late October, the watchdog was projecting a small surplus, not a giant gap.
In other words, at no point was there an official, gaping black hole in the sense of the government crashing into its own fiscal rules.
Meanwhile, in public…
While those surplus numbers sat quietly in the Treasury inbox, Reeves was doing early morning press conferences talking about the difficult circumstances and the need for everyone to contribute, setting expectations for painful tax rises.
The Budget that followed raised around £26 billion in extra taxes, while also upping welfare spending. Critics quickly joined the dots: if the OBR was showing a surplus, why sell the country a story about a looming fiscal disaster?
Cue headlines about lies, black holes and made-up misery.
The accusations
Conservative leader Kemi Badenoch accused Reeves of lying to the public and called for her to be sacked, arguing that the supposed hole in the finances was exaggerated to justify tax hikes that were really about funding higher welfare spending. Other critics described the pre-Budget gloom as a smokescreen and said the country had been deliberately misled.
Starmer has backed his chancellor, praising the Budget as responsible and saying it protects public services while building resilience into the system. Politically, though, the optics are brutal: months of black hole talk followed by an official watchdog saying there was no such thing.
Reeves’ defence
Reeves insists she did not lie. Her argument is that a big downgrade to productivity knocked around £16 billion off future tax revenues, and that while other factors like stronger wages and inflation later improved the outlook, the broader picture was still fragile. She says the extra tax was about building a bigger buffer and avoiding deeper cuts later, not about faking a crisis.
In her view, talking tough about the state of the finances was honest and frank, even if the formal forecasts never showed a gaping chasm.
So was there a black hole or not?
Mathematically, according to the OBR, no. The numbers showed a small surplus before Reeves locked in her Budget decisions. The public were told one existed and that is why they must face increased hardship and tax. What remains is a breach of public trust and government integrity that demands answers and not the dodging we are currently seeing.
The public deserve clarity, not creative storytelling. If the government built a narrative of crisis to justify a pre-planned tax raid, then voters have every right to ask whether the black hole was a misunderstanding, a political tactic or something far more deliberate. When a government tells people they must tighten their belts while the official forecasts suggest otherwise, it raises uncomfortable questions about honesty, transparency and who exactly is being protected.
If this turns out to be a calculated exaggeration, the next steps could be serious. Opposition parties will push for inquiries. Committees will demand documents. Economists will want to know why their independent forecasts were overshadowed by doom laden rhetoric. And the public, already struggling with the cost of living, may lose what little confidence they still had in the government’s handling of the economy.
At minimum, Reeves and Starmer must now explain, clearly and directly, why they continued to warn of a financial abyss when the OBR’s own projections showed the opposite. Without that explanation, this becomes more than a political disagreement. It becomes a test of credibility. Governments can survive many things, but being caught bending reality for fiscal convenience is rarely one of them.
If they truly believe the country faces difficult years ahead, they must say so with evidence, not metaphors. And if the black hole was never there, then the public need to know why they were told to fear it. In a democracy, trust is not optional. It is the currency that keeps everything else functioning, and right now, it is running dangerously low.
