Starmer aware there was no black hole’ and signed of Reeves’s ‘lies’ | Politics | News
Downing Street has confirmed that Sir Keir Starmer was pleased with a speech by Rachel Reeves that gave the perception of a £20bn black hole in the public finances, which actually turned out to be too much. In an extraordinary signal of support for Ms Reeves, who is accused of misleading the public about the need for taxes in her budget, No 10 said the Chancellor was “entirely correct”.
The Prime Minister’s support appears to be in direct conflict with the Office for Budget Responsibility (OBR), which informed the Chancellor as early as October 31 that there was no longer a shortfall in the public purse. But a few days later, on November 4, Ms Reeves gave a speech in Downing Street and said the country needed to raise taxes to plug the gap in its coffers.
He said Britain’s productivity was “weaker than we previously thought” and added: “What I want people to understand ahead of the Budget are the conditions we face. I can… sweep those challenges under the carpet. I’m being honest with people.”
The Telegraph reported Downing Street officials said last night that Sir Keir was aware of the OBR figures given before Ms Reeves’ speech.
A No 10 source told the newspaper: “Of course No 10 was aware of the OBR figures which showed the need to raise significant revenue to meet our commitments and achieve the desired headroom.”
The source continued: “No 10 was aware of the content of the speech, which we believe completely accurately outlined the need to raise revenues.”
But on Friday the OBR said it had informed the Chancellor as early as September 17 that rising wages and improved tax deductions from inflation meant the deficit was smaller than initially expected, and that it had informed him in October that it had been eliminated entirely.
A senior Labor source told the Telegraph: “This looks pretty bad. Keir has made a point of being more involved in the Budget all along and now it seems the story from the Chancellor is not what the OBR said it was. Keir and Rachel clearly have questions to answer.”
The chancellor will face fresh media scrutiny on Sunday for what he has told the public and markets about the state of the economy.
The OBR’s statement led Opposition figures to urge the Financial Conduct Authority (FCA) to investigate whether the Treasury was deceiving the public.
But Downing Street said the OBR forecast did not take into account spending increases resulting from the removal of the two-child benefit cap and U-turns on winter fuel payments and benefit cuts.
