Video Summary

In this video, the host critiques the recent actions of Labour leader Starmer and Chancellor Rachel Reeves, arguing that they misled the public regarding the state of the British economy ahead of the budget, primarily to justify a £26 billion tax increase intended for welfare funding. Referencing comments from political editor Chris Mason, the host contends that Reeves knowingly withheld vital information about unexpectedly strong tax receipts during a pre-budget news conference.

The analysis highlights the disparity between working families and those reliant on benefits, emphasising that while the government promotes welfare provisions, it remains unfair to those who choose to work, particularly in the context of a rising cost of living. The discussion calls for greater transparency and accountability from those in power, questioning the fairness of current welfare policies and advocating for a reassessment of how working individuals are compensated compared to those receiving state support.

Transcript

Stalmer still does not accept that Rachel Reeves and, by extension, he misled the whole of the British public about the state of the British economy in the run-up to this latest budget in order to justify raising taxes again across the board by £26 billion, largely to fund welfare, which I believe is the main principle of it.

As a legal and political commentator, I feel that it is my job and somewhat incumbent upon me to comment on this and call it out when I see it. But you don’t need to just take my word for it because I am not going mad. I’m not seeing things that aren’t there. This isn’t some off-the-wall commentary, as my views over the last few days about what’s been going on seem to align with the political editor for the BBC, Chris Mason, whose article I will share with you in this video.

Before which, if you would like me to call out these sorts of things where I see them, please subscribe to the channel. I know that I ask you every time, but thank you so much for doing that. I really do appreciate it.

If you want a dose of irony to keep in your mind as we go through this video, take a look at this tweet from Rachel Reeves on 2nd April. Many might think that it was a late April Fool’s joke from 2022. She said, "It is beyond insulting for the Tories to hike taxes during a cost of living crisis, all while their incompetence burns taxpayers’ cash away. Labour will treat taxpayers’ money with the respect it deserves." Huge irony there, because they also, as I recall, set up a specific department for saving money, only for it to be shut down because it didn’t save any money and actually cost the taxpayer a lot of money.

Perhaps more about that on my money channel, which I’ll link below. But what irony here when she’s saying that it is insulting that the Tories were hiking taxes during a cost of living crisis, when this is precisely what she’s done now to an additional tune of £26 billion.

Let’s jump first of all to Kaama’s blanket denial. Now, again with a caveat, he talks about lifting children out of poverty and all that sort of stuff, which I’m sure most of us agree with in principle. We just don’t agree with the way that it’s being done and that if they are going to find funds for it, it should be from elsewhere, not by misleading the public into a tax rise that nobody feels they deserve.

If you missed my video yesterday, a working family with one adult in full-time and another adult in part-time employment working on the national living wage would take home roughly £28,000 a year after tax. This is £18,000 less than the benefit income now available to an equivalent three-child family outside work on combined benefits. Matching that level of support through earnings alone would require a pre-tax salary of around £71,000. This pattern holds for single parents. I’ll link my previous video in the description; you can go and watch that as well.

But that aside, this is Kristama’s denial. He’s obviously hitched his position to Rachel Reeves’s position. If either one of them is brought down over this, then they both go down, in my view. And by which I mean obviously that members of their own party may call for no confidence because they might feel they’ve misled the British public.

Listen to this: "Look, there was no misleading. I simply don’t accept that I was receiving the numbers that being told that the OBR productivity review means you’ve got £16 billion less than you would otherwise have had shows that you’ve got an easy starting point. Yes, of course, all the other figures have to be taken into account."

So, in short, he just flat out doesn’t accept it because he says the numbers mean that they had less than they would otherwise have had. Rather than saying and accepting, which was true, that they had headroom and that there was no need to raise these taxes, he goes on to say that it was a choice. But it’s that choice that we need to explore very carefully in line with what they knew, when they knew it, and when they told the British public, because it’s suggested that they’ve only done that when it is politically expedient for them to do so.

Allow me to share with you this article by BBC’s political editor Chris Mason and a big bold statement of a headline, which other outlets have now reported on. Chris says that, in his judgment, Reeves was misleading on one specific point. Let’s look into it.

He says, "You may have seen the blizzard of headlines over the weekend in which the chancellor Rachel Reeves was variously accused of lying and misleading you before the budget last week. It is my job, after careful examination of the facts, to call it on your behalf in careful, precise language, and in my judgment, on one specific element of what the chancellor and the treasury told us before the budget, we were misled."

Let’s walk through this step by step. Much of this I’ve covered in my other videos here because she did that speech on 4th November, which was extraordinary and unusual. He says, "Let’s walk through this step by step." On 4th November, the chancellor called an extraordinary pre-budget news conference. This was novel and voluntary; such a thing has never happened before. Reeves called that news conference because she wanted to prepare the ground for a big budget full of difficult choices. Obviously, we all sort of knew that tax rises were coming.

Let’s be fair, much of what we heard from the chancellor in a breakfast speech that morning almost four weeks ago reasonably laid the ground for what was to come. She made it clear that big tax rises were coming, and she was right. She talked about the importance of her measures to address the cost of living and they were in her budget last week. She expressed a desire for more wiggle room in the spreadsheets against her self-imposed fiscal rules, so-called headroom, you know, money to spare. She delivered on that too, maintaining long-term investment spending.

Crucially, she also talked about productivity, a measure of the output of the economy per hour worked. The forecast and watchdog, the OBR, was expected to revise down its estimate for productivity growth. This decision by the OBR had big implications for Rachel Reeves, impacting the numbers, the spreadsheets, and therefore the calculations and trade-offs that she would have to make. In isolation, that made things harder for her without question. In other words, nothing she said in the news conference was wrong.

But, and this is the key point, we now know that she knew something then that she didn’t share with us that morning, and this is that tax receipts were much better than expected and more than offset the reduction in productivity growth. The OBR has since made that very clear and set out the timetable of when it told the Treasury, including the chancellor, what the chancellor knew about the tax receipts data at the time of the news conference.

And if you missed my video on that, there was this document where, in an extraordinary letter, the chair of the OBR wrote to address potential misconceptions, saying that the timelines don’t align with Rachel Reeves and what she said she knew at the time, clarifying that the last information was at the end of October and that it was positive; she had room to spare.

That in mind, back to this article from Chris. The OBR made it very clear and set out the timetable of what it told the Treasury, including about what the Chancellor knew regarding tax receipts data at the time of the news conference. In fact, Chris writes, "10 days later, the Treasury chose to volunteer this fact about tax receipts when the Financial Times reported that income tax rates wouldn’t change in the budget after all. She did the flip-flop on whether or not she was going to increase those rates. The markets then wondered how on earth the numbers would add up."

What followed was a briefing to me and others, which was accurate and intended to be reassuring to those markets, which amounted to saying that tax receipts are much stronger than we expected. So it’s okay.

In that news conference a month ago, the chancellor volunteered to share some information that she was privy to, but chose not to share some other information that she was also aware of, only to then choose to share the thrust of it when she judged it to be politically expedient 10 days later.

I should say, and this is the balancing act, as you would expect from someone writing neutrally, even if they call out someone for being misleading, he does then say that the Treasury maintains that it’s unfair to say that she was misleading because at the time of the news conference, the chancellor confronted a huge hole in the spreadsheets given the buffer or headroom she wanted to build up about the policy choices she wanted to make. So they maintain that it wasn’t misleading, the numbers do back this up.

Chris says that the OBR could say that the chancellor was right to be conservative and cautious, or that she should have based her plans on early versions of the watchdog’s forecast because that would be the right thing to do. OBR boss Richard Hughes will be answering questions from MPs on the Treasury Committee on Tuesday morning.

But the words on the day left an impression not at one with the facts we were later to discover and which the chancellor knew at the time. In other words, as the headline suggests, Rachel Reeves was misleading on that specific point. As I called out in my video and as other news outlets have also mentioned, we’ve done this fairly boldly. This extraordinary letter from the chair of the OBR aims to correct any misconceptions, in other words, to set the story straight and to clarify the facts, saying, "Hang on a minute; she knew about this beforehand."

This is one thing that we do when trying to get to the truth and the facts of the storyline, and it goes to credibility. If someone knew something at the time, this is extremely important in any legal case, whether it’s civil or criminal. If you fail to mention something earlier on, which you then later rely on, what does that start to sound like? It starts to sound like it may harm your defence if you fail to mention when questioned something that you later rely on. Anything you say may be given in evidence against you. So if you don’t mention something earlier on when questioned, like in an interview, and then you bring it up later to support your position, that weakens your overall position, and that is precisely what we’re talking about here.

Because she did have some information that she didn’t share and that she relies on. I think it is extraordinary, and I think it is extraordinary that we have the political editor for the BBC among others. The Telegraph has reported on it, and several others have as well.

All of this comes at a time when people are now comparing, "Well, hang on a minute, what do you really get for going out to work as a business owner or all of these kinds of things when you are comparing it with those who receive income from the state on welfare and benefits?" They’ve made it very clear in what was the rest of Kaama’s speech, which I won’t subject you to, but he does talk a lot about this being a bit of a welfare budget essentially.

And along with all the previous slogans that we’ve had, fixing the foundations, we now have a new one on the wall: a Britain built for all. But this seems a little bit odd to me. You cannot possibly level the playing field for absolutely everybody when some people, to put it bluntly, just choose not to work. Many people that receive assistance from the state do work very hard. This is absolutely not against any of those. I’ve seen various comments where people are getting upset because they’ve been taken ill and then they’ve relied on state support; that is fine.

No one is criticising that. Other people say, "I do work hard; I do have a job and I have children; single parents work hard and receive benefits from the state," and that’s fine. I don’t think people are criticising that. What people are quite rightly, in my personal view, criticising are those that choose not to work and will receive benefits that outweigh what someone who is going out to work will get as net income after tax.

With all the changes that are happening, they’ve frozen rates which is effectively a stealth tax. While they haven’t increased those taxes directly, they have further frozen those rates, which means that inflation will overtake and erode those, and I can honestly say that this is going to have a detrimental effect across all employees.

So, as always, I’d very much appreciate your comments and thoughts in the box below. Please do like the video, share it, and subscribe to the channel. These actions send little signals to YouTube. I will plug away until I get 1 million subscribers and beyond; I have no plans to stop there. So, please help me get there. As always, thank you for watching.