RACHEL Reeves has been accused of being in “la la land” as the Budget chaos heaped more pressure on the Chancellor.
Tory leader Kemi Badenoch launched a blistering personal attack on Ms Reeves after she was accused of misleading the public over tax hikes.
The heated Commons exchange came a full seven days after taxes went up by £26 billion as welfare spending went up by £16 billion.
An early morning press conference in Downing Street was held as the Treasury contemplated breaking a manifesto pledge to raise income tax.
Ms Badenoch brought up previous claims of plagiarism in a book Ms Reeves wrote and inaccuracies in her CV in the blistering exchange with Sir Keir Starmer.
She hit out: “We now know the black hole was fake, her book was fake, her CV was fake, even her chess claims are made up.
“She doesn’t belong in the Treasury, she belongs in la-la land. They raised taxes on working people. They raised taxes on working people.
That £16bn was to increase benefits to protect them from their backbenchers.”
The Tory chief also pointed to Richard Hughes who quit his role as boss of the Budget watchdog when their economic forecasts leaked online before Ms Reeves got on her feet last week.
She said: “Does the Prime Minister believe that when an organisation descends into total shambles, the person at the top should resign?”
Sir Keir responded: “We’re fixing the mess that they left and I’m very proud to be doing so.”
He also accused Badenoch “completely losing the plot” when she suggested the Chancellor should be prosecuted for market abuse ove rthe Budget process.
Ms Badenoch also said that the Prime Minister was now beholden to his backbench MPs following his decision to scrap the two-child benefit cap.
She said that the Labour boss “can’t run his own party, let alone the country”. The decision to reverse the cap will cost in the region of £3 billion.
Ms Reeves has faced pressure ever since the Office for Budget Responsibility released a detailed account of its private talks with the Treasury.
Discussions showed officials had been told there was a £4.2billion surplus, not a hole.
The watchdog said tax receipts were higher than expected and the Treasury had been informed of the surplus before any policy decisions.
This sits awkwardly with the grim warnings Ms Reeves delivered just days later, when she said Britain’s finances were “weaker than we previously thought” and even hinted at income tax hikes.
The Tories have called for the Financial Conduct Authority to investigate “possible market abuse” by the Treasury and No10.
Shadow Chancellor Mel Stride wants the Financial Conduct Authority to investigate “possible market abuse” by the Treasury and No10.
He wrote to the City watchdog: “It seems increasingly clear that the Chancellor has been giving an inaccurate picture of the economic and fiscal context.
“This appears to have been driven by political considerations.”
The Scottish National Party has also joined calls for an FCA probe into “deliberately false and misleading” briefings.
And the Tories have launched a campaign and petition calling on Sir Keir to sack Ms Reeves.