Starmer says he is proud of Budget as he denies misleading public

Sir Keir Starmer has denied his chancellor misled the public about the country’s finances ahead of last week’s Budget.

Conservatives accused Rachel Reeves of giving an overly pessimistic impression as a “smokescreen” to raise taxes, while Kemi Badenoch claimed she was “lying to the public”.

The Prime Minister insisted there was “nothing misleading” and pointed to the lowered forecasts for economic productivity, which he said meant the government had £16bn less money than it otherwise would have.

In his speech, Sir Keir said he was “proud” of the Budget and highlighted measures aimed at reducing child poverty and the cost of living.

Meanwhile, the head of the government’s independent spending watchdog, the Office for Budget Responsibility (OBR), Resigned due to mistakenly early release of budget analysis.

The document contained market-sensitive forecasts and revealed key details of the chancellor’s announcement almost an hour before the announcement.

In his resignation letter, Richard Hughes said it was a “technical but serious error” and that he took “full responsibility” for the shortcomings identified in the investigation into the incident.

Reeves has given strong signals ahead of his Budget on 26 November that the government plans to increase income tax rates; It was a move that would fail to deliver on a key manifesto promise made by Labor during last year’s general election campaign.

The Chancellor has repeatedly refused to rule out the possibility, pointing out that economic productivity forecasts are weaker than expected.

At a rare Downing Street press conference on November 4, he warned that this would “also have consequences for the public finances, with tax revenues falling”, in comments that were interpreted as paving the way for tax increases.

But, On Friday the OBR announced Before the Prime Minister’s press conference he told the Treasury that the fall in productivity was offset by higher wages, which increased the government’s tax revenues.

This was not made public until the Financial Times reported on 13 November that income tax rates would not increase in the Budget; Government sources explained the move by citing better-than-expected forecasts for wages and tax revenues.

Ultimately, the Budget included a tax increase of £26bn, with £8bn achieved by extending the freeze on income tax and National Insurance thresholds for a further three years, but no increase in income tax rates.

Answering journalists’ questions after his speech, BBC political editor Chris Mason asked Sir Keir whether Reeves, who could not sincerely explain what he knew about public finances at the pre-Budget press conference, was misleading the public.

In response, the prime minister said the decline in productivity was a “difficult starting point”, while saying the government was also committed to protecting the NHS, reducing borrowing costs and reducing the cost of living.

He added: “In this environment it was inevitable that we would always have to raise revenue. So there’s nothing misleading about that.”

Sir Keir also confirmed publicly for the first time that there was a point when he thought the government would have to break its tax return commitment.

But he said figures had improved in the pre-Budget period and “it has become clear to me and others that we can do what we need to do on our priorities without breaching the manifesto”.

He added: “I didn’t want to violate the manifesto and that’s why we came to the decisions we did.”

Badenoch called on Reeves to resign, saying people were “making real decisions because the chancellor told them he was going to raise taxes of all kinds, but we understand that’s not the case”.

Criticizing the leak of potential measures ahead of the budget, the Conservative Party leader told the BBC: “Some people have cut their pensions, that’s irreversible.

“Some people left the country because of exit tax concerns. Others fixed their mortgages in a way they wouldn’t.”

While Badenoch did not call for the Prime Minister to leave, he said “if he has anything to do with these misleading briefings, he has questions to answer.”

In his speech, Sir Keir argued that the Budget made “necessary” and “fair choices”.

He acknowledged that “tax increases make people’s lives harder” but argued the alternatives were cutting public services, ignoring child poverty or taking on extra debt.

The Prime Minister said the Budget was a “moment of personal pride”. decision to abolish the two-child allowance limit It will save hundreds of thousands of children from poverty.

He also vowed to continue reforming the welfare system, which he said “condemns people to poverty” and “characterizes young people as too sick to work.”

Over the summer the government abandoned planned welfare cuts In the face of a massive rebellion by Labor Party MPs.

Asked whether he could get the support of his own MPs to reform the system, Sir Keir said it was a “moral duty” and that there was a “strong consensus” on the need to get young people into work.

He did not provide further details about potential reforms; He said two reviews were ongoing into “neets” (children aged 16 to 24 not in education, employment or training) and a review into the health and disability benefits required to “complete their course”.

The Prime Minister also insisted that the budget would boost economic growth. Although the OBR concluded that not a single measure would change the watchdog’s growth forecast for the next five years.

Sir Keir said he was “confident we can beat forecasts”. After the OBR predicted the economy would grow slower than expected from next year.

He promised to cut “unnecessary bureaucracy” and regulations to build the country.

Meanwhile, he said the Brexit deal had “significantly damaged our economy” and vowed to “continue to move towards a closer relationship with the EU”.

But Liberal Democrat leader Sir Ed Davey said: “Keir Starmer’s speech talked about boosting growth but he refuses to do the biggest thing to achieve that: fixing our trade with the EU through a new customs union.”