Keir Starmer denies Rachel Reeves misled the public in the build-up to the Budget

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Dan Martin
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keir starmer and rachel reeves
Picture by Simon Dawson / No 10 Downing Street

Prime minister Keir Starmer has defended chancellor Rachel Reeves and said “there was no misleading” ahead of the Budget.

Reeves has been accussed of misleading the public with an “overly bleak” picture when she appeared to say the government would break its promise to not increase income tax rates due to the UK’s “weaker than previously thought” productivity.

However, a letter published by the OBR said it provided the government with forecasts showing that its productivity downgrade was offset by increases in real wages and inflation.

But responding to journalists after delivering a speech in London on Monday, the prime minister said there was “no misleading”. He said he didn’t accept that the OBR figures gave the government an “easy starting point” and argued that that they showed productivity had been revised down so the government would have had £16bn less in revenue by 2029-30.

“Therefore, against that backdrop, it was inevitable that we would have to raise revenue. So there was no misleading there”, he said.

Starmer admitted there was a point where he considering breaking a manifesto pledge of “some significance” but it became clear we “might be able to do what we needed to do with our priorities without that manifesto breach”.

Budget ‘a moment of personal pride’

Starmer said the Budget was “a moment of personal pride” due to his aim to tackle child poverty with measures like scrapping the two child benefit cap.

The announcement made “necessary” and “fair choices”, the prime minister said.

He continued: “I’m not going to pretend that there aren’t alternatives. Politics is always about making choices. We could have cut public services, we could have ignored child poverty, we could have rolled the dice with extra borrowing, but I firmly believe that those options have been tested to destruction.”

Starmer said: “I’m also confident we have now walked through the narrowest part of the tunnel, because while I know it’s still hard for lots of people, while I know the cost of living crisis has not gone away, in the year ahead you will see the benefits of our approach”.

On help for businesses, he said:

“We’re removing barriers to business right across the economy, in planning, industrial policy, pension reform, artificial intelligence, capital investment, and right at the heart of the Budget, we have a package of measures that give the green light for the world’s best entrepreneurs to start scale and list their companies in Britain.

“But we have to be clear at this stage of our plan, the most important things that we can do for growth, the most important things that we can do for business is first to drive inflation down, so that interest rates come down further still, and the cost of business investment comes down with it. Second, to retain market confidence that allows for real economic stability, so that businesses can plan with certainty.”

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