The political storm surrounding the UK's 2025 budget intensified this week as the head of the government's fiscal watchdog resigned, piling pressure on Chancellor Rachel Reeves and Prime Minister Keir Starmer.
Richard Hughes, the chair of the Office for Budget Responsibility (OBR), stepped down following the accidental early publication of a market-sensitive budget document. The incident, dubbed 'budget black-hole gate', has triggered a major political crisis for the Labour government in its second week of fallout.
The OBR's Security Breach and Resignation
The controversy deepened when it was revealed that the OBR's website, which hosted the sensitive draft economic assessments, was not securely hosted and was built using the WordPress platform. This security lapse led to the premature release of data in the weeks leading up to the official budget announcement.
Hughes's resignation came as OBR officials appeared before the Treasury select committee to explain the decision to release their assessments early, a move perceived as a direct challenge to Chancellor Reeves. The committee is probing whether the chancellor misled the public about the state of the nation's finances, a question now valued at £4.2 billion – the disputed figure at the heart of the 'black hole' debate.
Reeves and Starmer's United Front
In response to the escalating scandal, Prime Minister Keir Starmer emerged to deliver a robust defence of his chancellor. During a visit to a London community centre, Starmer issued what was seen as an ultimatum, stating that any attempt to bring down Reeves would have to go through him first. He positioned himself and the chancellor as an inseparable political package.
Starmer also used a recent speech to highlight his government's social policies, claiming pride in scrapping the two-child benefit limit and lifting half a million children out of poverty. This claim has drawn scrutiny, given that last year he suspended seven Labour MPs for voting in favour of a similar motion.
Political Fallout and Future Challenges
The ongoing fiasco has exposed significant tensions within the Labour Party. Party malcontents are reportedly waiting for the outcome of the local elections in May 2025, which are widely anticipated to be difficult for the government, before considering any move against the leadership.
Critics have contrasted the chancellor's presentation as a 'hapless victim of circumstance' with the prime minister's portrayal as a man of decisive action. Further criticism has been levelled at the government for claiming credit for policies, such as the expansion of free childcare to 30 hours by September, which were originally pledged by the previous Conservative chancellor, Jeremy Hunt, in 2023.
As the government attempts to navigate the crisis, the fundamental question remains whether the UK's fiscal challenges are far greater than the disputed £4.2 billion figure, and how the Reeves-Starmer partnership will withstand the mounting pressure in the weeks and months ahead.
