Rachel Reeves and Trevor Phillips on Sky News. Rachel Reeves has been forced to deny lying to the country about the state of the public finances as she clashed with Trevor Phillips on Sky News. Treasury officials repeatedly suggested in the run-up to the Budget that there was a black hole of up to £30bn in the government’s sums. Reeves herself even called an emergency Downing Street press conference at which she painted a gloomy picture of the state of the economy and warned voters their taxes would need to go up. But figures released by the Office for Budget Responsibility (OBR) financial watchdog on Friday showed that gap did not exist and that the chancellor actually had a surplus of £4.2bn. The Tories have accused Reeves of misleading voters because she wanted to put up taxes to increase welfare spending and called on Keir Starmer to sack her. On Sky News, Phillips quoted Tory leader Kemi Badenoch , who said: “For months, Reeves has lied to the public to justify record tax hikes to pay for more welfare’. Did you lie?” The chancellor initially avoided giving a straight answer, saying she wanted to “reduce child poverty”. Phillips told her: “I just asked you did you lie, and I have to say the answer I was looking for was ‘no’. I didn’t hear the word no. I just asked you ‘did you lie’?” Reeves replied: “Of course I didn’t. Watch the whole excange below: The chancellor has defended herself after accusations from Kemi Badenoch that she lied about tax hikes to pay for more welfare. When pressed on the issue by Sky's @TrevorPTweets , Reeves said "of course I didn't (lie)". #TrevorPhillips https://t.co/JayZ8ZIkk3 pic.twitter.com/Zafq3dGI3x — Sky News (@SkyNews) November 30, 2025 Related... Rachel Reeves Says She Will Be Chancellor For 'Years And Years' Despite Budget Tax Row Rachel Reeves Watches Awkwardly As Comments From A Year Ago Come Back To Haunt Her Rachel Reeves Accused Of Misleading Voters Over State Of UK Economy Ahead Of Budget