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

"Sir Keir Starmer has denied his chancellor misled the public about the nation's finances ahead of last week's Budget. The Conservatives have accused Rachel Reeves of giving an overly pessimistic impression as a "smokescreen" to raise taxes, with Kemi Badenoch claiming she "lied to the public". The prime minister insisted there was "no misleading", pointing to downgraded forecasts for economic productivity which he said meant the government had 16bn less than it otherwise would have had."

"In the run-up to her Budget on 26 November, Reeves gave strong indications the government was planning to increase income tax rates - a move which would have broken a key manifesto promise made by Labour during last year's general election campaign. The chancellor repeatedly refused to rule this out, as she pointed to forecasts for economic productivity being weaker than expected."

"In a rare Downing Street news conference on 4 November, she warned this "has consequences for the public finances too, in lower tax receipts", in comments which were widely interpreted as laying the ground for tax rises. However, on Friday the government's independent spending watchdog, the Office for Budget Responsibility (OBR), revealed it had told the Treasury before the chancellor's news conference that the downgrade to productivity was offset by higher wages, which increase the government's tax revenues."

Sir Keir Starmer denied the chancellor misled the public about the nation's finances ahead of the Budget. Conservatives accused Rachel Reeves of presenting overly pessimistic forecasts as a "smokescreen" to raise taxes, with claims she "lied to the public". The prime minister cited downgraded productivity forecasts that reduced government resources by £16bn. Reeves indicated possible income tax increases before the 26 November Budget, citing weaker productivity forecasts. The OBR told the Treasury that lower productivity was offset by higher wages, boosting tax revenues. The Budget implemented £26bn of tax rises, including £8bn from freezing income tax and National Insurance thresholds.

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