Prime Minister Sir Keir Starmer has robustly defended Chancellor Rachel Reeves, stating there was “no misleading” of the public or Cabinet regarding the state of the public finances in the run-up to last week's Budget.
Claims of Misleading Figures Rejected
The Chancellor has faced accusations from political opponents that she overstated the scale of the fiscal challenge before unveiling a Budget containing £26 billion in tax rises. It was also reported that she had been accused of misleading Cabinet ministers.
Sir Keir, speaking on Monday, firmly rejected these claims. He stated he was personally receiving the numbers and argued the starting point was far from easy. “I simply don’t accept... that being told that the OBR productivity review means you’ve got £16 billion less than you would otherwise have had shows that you’ve got an easy starting point,” the Prime Minister said.
He acknowledged there was “no pretending” the economic inheritance was good, revealing that at one point the government believed it might have to breach its manifesto commitments, an apparent reference to scrapped plans to raise income tax.
OBR Leak and Resignation
The controversy unfolded alongside a significant leak from the Office for Budget Responsibility (OBR). The independent watchdog accidentally released its analysis early, revealing key details of the Chancellor's statement before it was delivered to Parliament.
In the aftermath, OBR chairman Richard Hughes resigned on Monday afternoon. Mr Hughes said he stepped down to allow the organisation to “quickly move on” from the error. A report into the mistake concluded the OBR's leadership needed to take “immediate steps to change completely” how it publishes sensitive forecasts.
Prime Minister Starmer called the early disclosure a “massive discourtesy” to Parliament and a “serious error,” but stressed the OBR itself remained a “vital and integral” part of the UK's fiscal rules.
Welfare Reform and Cabinet Briefings
Chancellor Reeves directly addressed reports of misleading the Cabinet, telling BBC Wales that ministers are traditionally briefed on the full Budget details on the morning of the statement itself. “The Cabinet are briefed on the morning of the Budget on the Budget numbers,” she stated, adding that the leak had not originated from the Treasury.
The Prime Minister used a speech on Monday to signal a fresh push on welfare reform, describing it as a “moral mission.” He pointed to the decision to lift the two-child benefit cap but sidestepped questions on committing to reduce the overall benefits bill.
This follows a major U-turn earlier in the year, when Sir Keir abandoned planned welfare cuts after a backbench rebellion. That climbdown blew a £4.8 billion hole in the Chancellor's Budget preparations.
Cabinet minister Darren Jones echoed the Prime Minister's defence, insisting the Chancellor had the “full support” of the Cabinet and had not misled anyone. He maintained there was a genuine “funding gap” to address, partly due to the OBR's revised economic assumptions.
The Conservatives have written to Sir Keir demanding the Chancellor explain herself to MPs, while the Tories and SNP have asked the Financial Conduct Authority to investigate policy leaks ahead of the Budget.
