The Chancellor Rachel Reeves has faced an absolutely vitriolic campaign in the media for misleading or indeed, lying about the state of the UK economy in the run-up to her budget speech last week. She seems to have been unfairly singled out for a concerted attack with blaring headlines almost daily, demanding her resignation or sacking. It's all totally confected rubbish. The BBC’s political reporter Chris Mason actually penned a piece which said: Why, in my judgement, Reeves was misleading on one specific point. Apparently, he has set himself up as her judge and jury, delivering his verdict to the nation, rather than reporting on events as he’s paid to do. In any case, he’s wrong.
The row centres around what chancellors and the Treasury call ‘headroom’ or what you and I might think of as having a bit of spare money at the end of the year. If you’re on a tight but specific income and calculate your rent, energy, food, clothes, petrol, etc, at the start of the year, you would always try to make sure your expenditure doesn’t exceed your income by a small safety margin. That margin is the Treasury's ‘headroom.’
But governments can’t forecast with any precision what their tax revenues will be over 12 months or what departments will actually spend. All sorts of unforeseen events blow the government finances off course. Hence, the need for a bit of a buffer.
In the weeks running up to the budget, it appeared there was a small shortfall of a few billion instead of a surplus or in Treasury parlance, some headroom. Reeves briefed journalists on that basis. Later, at the end of October, the OBR calculated that the shortfall had become a surplus of about £4.2 billion. Bear in mind this is in an economy worth about £3,000 billion with government spending of about £1,200 billion. The surplus was about 0.3% of spending.
And, the surplus didn’t take into account having to pay this year’s winter fuel allowance.
But Reeves kept briefing and making public statements about a ‘black hole’ in the public finances, and this is what has upset some commentators and the hyenas in the press. They accuse her of being a liar or misleading us all.
The head of the OBR, Professor David Miles, gave evidence to the Treasury Select Committee yesterday, and he confirmed that Reeves didn’t mislead anyone. The BBC covered the session and show a bar chart of the headroom at all the budgets from 2010 to today. It makes interesting reading.
In 2014, the UK’s GDP was roughly £2,400 billion and the Total Managed Expenditure (government spending) was about £740 billion. George Osborne was then Chancellor, and he gave himself £80 billion in headroom, or well over 10% of spending. This is more than 30 times what the OBR were forecasting for Reeves, at best, in November 2025.
She has made it known in recent weeks that she thought the £10 billion average headroom that has been the norm for the last few years was not enough, and while Osborne had been excessively cautious in 2014, the headroom should be higher, at around £20 billion. That had been the usual sort of minimum figure between 2010 and 2022. In several years, it was over £40 billion, and the UK economy was smaller then..
You can see this clearly in the bar chart, which is shown below:
Each bar represents 6 months, so two per year. You can see for the past three years, headroom has averaged less than £10 billion. Pre-budget, the OBR had changed their forecast from no headroom and a small shortfall to a surplus of £4.2 billion, or what Professor Miles described as a "tiny margin." So, even if Reeves had aimed to maintain the average headroom of £10 billion, she would have needed to raise taxes or cut spending. In other words, there was a fiscal 'black hole' in the public finances. What we are talking about is the size of the hole.
When a ‘black hole’ emerges in the government’s spending plans, the first thing that disappears into it is the headroom, which is exactly what happened. To restore the headroom to what it was or even increase it to give yourself more margin for safety, you essentially recreate the black hole, which you then need to fill either by means other than the headroom, i.e. spending cuts or tax rises. Reeves opted to hint about tax rises, and the idea of raising the basic rate was floated, although it broke a manifesto pledge.
In the end, she was able to achieve a headroom of £22 billion without the need to increase the basic rate. That is still not a huge margin for error, only about 1.5%, given that it is the average sort of revision made to the OBR forecast every six months. And still way down on Osborne’s 10%+
I don’t remember anyone attacking Osborne for giving himself headroom of £80 billion in the middle of a period of austerity when he and Cameron were cutting anything and everything like two mad axemen, even down to slashing local library services. He could have spent £60 billion more had he chosen to, or cut taxes, and still had £20 billion in headroom. Essentially, by demanding so much headroom, he created his own black hole which he filled with spending cuts.
It seems like double standards to me.
The Times is now reporting that Reeves overclaimed her prowess at chess.
A former junior champion said Reeves did not hold the official British girls’ under-14 title, and critics ask broader questions about her CV and career claims ⬇️— The Times & Sunday Times (@thetimes.com) 2 December 2025 at 21:49
This is about the chancellor saying she was the British Girls' Under-14 chess champion. Somebody now says this isn’t true; she actually won the Under 14 British Women’s Championship, which she shared with three others. Reeves is 46, so we're talking about events 32 years ago and the use of the words ‘girls’ or ‘women’ in the context of being a national champion, which the report confirms she was.
It is pettiness gone mad and begins to look like persecution. The press demands a level of accuracy of some politicians that it doesn't hold itself to. This is true in spades for The Daily Mail, which isn't accepted as a reference by Wikipedia because it's not trusted and it employs Boris Johnson, perhaps the most practised and prolific liar in British political history, on a £1 million a year package.
Ukraine
Talks in the Kremlin between the US and Russia haven’t made a ‘breakthrough’, according to the BBC this morning. Putin can’t even agree to a ceasefire. Nobody as far as I read, has ever asked Putin what is stopping him from agreeing to one. He won’t stop until he’s forced to.
But, you can tell he’s worried when he starts issuing threats about nuclear weapons or hypersonic missiles or whatever. But this week he’s gone a bit further, warning that if Europe launches an attack on Russia, they are ready.
I think this level of public stupidity shows he’s desperate. First, Europe hasn’t threatened Russia since 1941, while Russian tanks have rolled westward any number of times. Second, whatever the Russian army was pre-2022, it is now an emaciated shadow. It has lost a massive amount of equipment, 11,000 tanks, 430 planes and 340 helicopters, plus over a million men killed or wounded, to take about 20% of Ukraine. It hasn't actually faced NATO at all.
His economy is on its knees and very near to total collapse. Russian papers a few days ago reported that half the shoe and clothes shops in Russia have closed because nobody is spending. Inflation is running at 20% a year. Oil revenues have been significantly reduced due to sanctions.
He looks more like Chemical Ali every day. It is all bluff.
