Did the chancellor mislead the public, and her own cabinet, before the budget?

It’s a good question, and we’ll come to it in a second, but let’s begin with an even bigger one: is the prime minister continuing to mislead the public over the budget?

The details are a bit complex but ultimately this all comes back to a rather simple question: why did the government raise taxes in last week’s budget? To judge from the prime minister’s responses at a news conference just this morning, you might have judged that the answer is: “because we had to”.

“There was an OBR productivity review,” he explained to one journalist. “The result of that was there was £16bn less than we might otherwise have had. That’s a difficult starting point for any budget.”

Politics latest: OBR boss resigns over budget leak

Time and time again throughout the news conference, he repeated the same point: the Office for Budget Responsibility had revised its forecasts for the UK economy and the upshot of that was that the government had a £16bn hole in its accounts. Keep that figure in your head for a bit, because it’s not without significance.

But for the time being, let’s take a step back and recall that budgets are mostly about the difference between two numbers: revenues and expenditure; tax and spending. This government has set itself a fiscal rule – that it needs, within a few years, to ensure that, after netting out investment, the tax bar needs to be higher than the spending bar.

At the time of the last budget, taxes were indeed higher than current spending, once the economic cycle is taken account of or, to put it in economists’ language, there was a surplus in the cyclically adjusted current budget. The chancellor had met her fiscal rule, by £9.9bn.

This, it’s worth saying, is not a very large margin by which to meet your fiscal rule. A typical budget can see revisions and changes that would swamp that in one fell swoop. And part of the explanation for why there has been so much speculation about tax rises over the summer is that the chancellor left herself so little “headroom” against the rule. And since everyone could see debt interest costs were going up, it seemed quite plausible that the government would have to raise taxes.

Then, over the summer, the OBR, whose job it is to make the official government forecasts, and to mark its fiscal homework, told the government it was also doing something else: reviewing the state of Britain’s productivity. This set alarm bells ringing in Downing Street – and understandably. The weaker productivity growth is, the less income we’re all earning, and the less income we’re earning, the less tax revenues there are going into the exchequer.

The early signs were that the productivity review would knock tens of billions of pounds off the chancellor’s “headroom” – that it could, in one fell swoop, wipe off that £9.9bn and send it into the red.

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That is why stories began to brew through the summer that the chancellor was considering raising taxes. The Treasury was preparing itself for some grisly news. But here’s the interesting thing: when the bad news (that productivity review) did eventually arrive, it was far less grisly than expected.

True: the one-off productivity “hit” to the public finances was £16bn. But – and this is crucial – that was offset by a lot of other, much better news (at least from the exchequer’s perspective). Higher wage inflation meant higher expected tax revenues, not to mention a host of other impacts. All told, when everything was totted up, the hit to the public finances wasn’t £16bn but somewhere between £5bn and £6bn.

Why is that number significant? Because it’s short of the chancellor’s existing £9.9bn headroom. Or, to put it another way, the OBR’s forecasting exercise was not enough to force her to raise taxes.

The decision to raise taxes, in other words, came down to something else. It came down to the fact that the government U-turned on a number of its welfare reforms over the summer. It came down to the fact that they wanted to axe the two-child benefits cap. And, on top of this, it came down to the fact that they wanted to raise their “headroom” against the fiscal rules from £9.9bn to over £20bn.

These are all perfectly logical reasons to raise tax – though some will disagree on their wisdom. But here’s the key thing: they are the chancellor and prime minister’s decisions. They are not knee-jerk responses to someone else’s bad news.

Yet when the prime minister explained his budget decisions, he focused mostly on that OBR report. In fact, worse, he selectively quoted the £16bn number from the productivity review without acknowledging that it was only one part of the story. That seems pretty misleading to me.

Republican lawmakers on the US House Financial Services Committee and House Oversight Subcommittee have released a final report on what they called “debanking of digital assets,” claiming that the previous administration was responsible for cutting off access to financial services for some crypto companies and individuals.

In a Monday notice, House Financial Services Chair French Hill and Oversight Subcommittee Chair Dan Meuser claimed that regulators under the administration of former US President Joe Biden “used vague rules, excessive discretion, informal guidance, and aggressive enforcement actions to pressure banks away from serving digital asset clients” — actions many Republicans have referred to as “Operation Choke Point 2.0.”

The report concluded that legislative action, among other measures, was necessary to provide clarity for the cryptocurrency industry. Hill and Meuser said, “Congress must enact digital asset market structure legislation,” known as the CLARITY Act, and other bills targeting the cryptocurrency industry.

“Overall, the CLARITY Act heads off a future Operation Choke Point 3.0 by reversing the SEC’s regulation by enforcement approach, enabling market participants to lawfully operate in the US under clear rules of the road, and making clear that banks may engage in the digital asset ecosystem,” said the report.

The Digital Asset Market Structure bill, which was passed by lawmakers in the House of Representatives in July, is under consideration in the Republican-led Senate Agriculture Committee and the Senate Banking Committee, both of which have released their versions of draft legislation. Senate Banking Chair Tim Scott said in November that the committee planned to have the bill ready for signing into law by early 2026. 

Related: How market structure votes could influence 2026 crypto voters

Cointelegraph reached out to House Financial Services Committee ranking member Maxine Waters for comment on the report, but had not received a response at the time of publication. 

Claims of debanking by regulators with the FDIC, Fed, OCC and SEC

Many individuals connected to the cryptocurrency industry or who hold digital assets have reported receiving letters from financial institutions saying that they would no longer be allowed to use their services. According to the report, “at least 30 entities and individuals engaging in digital asset-related activities” were debanked in some fashion by US regulators under the Biden administration.

Among the measures, the report claimed that regulators enacted to debank crypto companies or individuals included the Federal Deposit Insurance Corporation (FDIC) sending “pause” letters for financial institutions to encourage clients to sever ties to digital assets, the Office of the Comptroller of the Currency (OCC) laying out “additional red tape for digital asset-related activities,” and the Securities and Exchange Commission using “regulation by enforcement tactics” to target crypto companies.