SNP Demands FCA Probe Into Treasury’s £20bn “Black Hole” Claims
The Scottish National Party has called for an official investigation into whether the Treasury misled the public about a £20 billion fiscal “black hole” ahead of this week’s Budget, with accusations of “deliberately false and misleading” briefings.
Key Developments
- SNP urges Financial Conduct Authority to investigate Treasury briefings
- Claims of £20 billion “black hole” now questioned after OBR disclosure
- Chancellor Rachel Reeves accused of potential “market manipulation”
- Opposition figures demand answers over pre-Budget speculation
Budget Controversy Escalates
The controversy centers on pre-Budget speculation that Chancellor Rachel Reeves faced a significant shortfall in spending plans. Ms Reeves herself contributed to this narrative in a November 4 speech, suggesting poor productivity growth would force tax increases due to “consequences for the public finances.”
OBR Revelation Changes Narrative
The Office for Budget Responsibility disclosed it had informed the Chancellor as early as September 17 that the fiscal gap was smaller than initially anticipated. This revelation has sparked accusations from opposition figures, including Conservative leader Kemi Badenoch, that Ms Reeves misled the public.
Downing Street has denied these claims, maintaining that Ms Reeves “talked about the challenges the country was facing.”
Market Manipulation Allegations
SNP Westminster leader Stephen Flynn accused the Treasury of briefing about a “fake” £20 billion black hole and questioned whether Ms Reeves’s November 4 speech constituted “market manipulation.”
“That intervention from the Chancellor, alongside the briefings on the need to fill the non-existent £20 billion Treasury black hole, had a significant impact on the financial markets, on business investment decisions, on foreign exchange rates and will likely have fed into the Bank of England decision-making around interest rates which took place two days after her speech.”
Describing the Budget as “built on a lie,” Mr Flynn demanded an immediate investigation into what he called “false and deeply misleading Budget briefings” from the Treasury.
The FCA has declined to comment on the letter, while the Treasury has been contacted for response.
