Prime Minister Keir Starmer is mounting a desperate defence of his Chancellor, Rachel Reeves, today as she faces a deepening crisis over accusations she misled the public to justify massive tax rises.
PM's Press Conference Amid Mounting Fury
Sir Keir is holding a press conference to defend the recent Budget package and urge Labour MPs to remain loyal to his government's "long-term plan". This comes after a weekend of brutal recriminations directed at Ms Reeves, with even Cabinet ministers reported to be furious at being kept in the dark.
The Chancellor is now confronting a twin threat of potential investigations. Downing Street's standards watchdog, Sir Laurie Magnus, could probe her conduct, while the Financial Conduct Authority (FCA) may also examine the matter after Tory accusations of "possible market abuse".
The Central Allegation: A 'Black Hole' That Wasn't There?
The core of the controversy lies in Ms Reeves's pre-Budget warnings. For weeks, she publicly stated that the independent Office for Budget Responsibility (OBR) had identified a huge black hole in the public finances, necessitating tough tax decisions.
However, the OBR has revealed it informed the Treasury as early as September that downgrades in productivity forecasts were being offset by better-than-expected tax revenues. Crucially, by the end of October, Budget forecasts indicated the government was on course to run a small surplus.
Sir Keir is expected to confirm he too was aware for months that the OBR had not detected a structural deficit. This raises serious questions about the Chancellor's repeated public statements, which appeared to lay the groundwork for what Nigel Farage called a "£30 billion tax raid".
Reeves's Defence and Mounting Political Fallout
In a series of broadcast interviews, Rachel Reeves denied lying to the public. She argued the main driver for her decisions was a "big downgrade in productivity" from the OBR, and that she required a larger fiscal buffer to prevent market panic over government debt.
When pressed by Sky News presenter Trevor Phillips on whether she had lied, she initially dodged the question before stating: "Of course I didn't." She admitted knowing about the surplus when she delivered a speech highlighting the grim state of the finances but insisted her characterisation was necessary.
The political fallout is intensifying. Tory leader Kemi Badenoch has repeated her call for the Chancellor to resign, citing the emergency press conference Ms Reeves held to discuss the dire finances. Meanwhile, senior Tory MP Alex Burghart has demanded Ms Reeves come to the Commons to "explain the extent to which she misled the public".
In a letter to the PM's standards adviser, Reform UK's Nigel Farage argued voters faced the heaviest tax burden in generations "on the basis of what increasingly looks like a sustained misrepresentation". He suggested the Ministerial Code, which demands truthful information to Parliament, may have been broken.
In a bid to quell the rebellion, Sir Keir is also expected to announce a new crackdown on welfare spending to counter claims the tax rises are being blown on benefits, and hint at a major new move to unwind Brexit to placate mutinous Labour MPs.
With the fates of the Prime Minister and his Chancellor seen as fundamentally intertwined, the coming days will test whether they can cling on as the crisis over the Budget's foundation continues to escalate.
