UK (Parliament Politics Magazine) – British PM Sir Keir Starmer rejects claims he and Chancellor Rachel Reeves misled voters on the Budget, saying a £16bn productivity gap made tax hikes inevitable.
As reported by The Telegraph, Sir Keir Starmer rejects accusations that he and Rachel Reeves misled the public about the nation’s finances ahead of the recent tax-heavy Budget.
How did Keir Starmer defend himself and Rachel Reeves on the Budget?
Sir Keir Starmer told reporters he and Chancellor Rachel Reeves were transparent on public finances, responding to questions about whether the full truth had been shared.
He said,
“On the build up to the Budget, let me just step through that in some detail. Because there was an OBR productivity review. The result of that was there was £16bn less than we might have otherwise had. That’s a difficult starting point for any Budget.”
The prime minister added,
“We had already made commitments that I think I’d expressed to you and many others, many times over, that we were going to protect our public services particularly the NHS, to cut borrowing costs, and to bear down on the cost of living … We had clear commitments that we’d made throughout the process as to what it was that we were going to achieve.”
How did Keir Starmer respond to criticism of the ‘shambolic’ Budget?
When asked about the “shambolic” Budget preparations, and whether the fault lay with him or Rachel Reeves, Keir Starmer replied,
“We have protected our public services and the NHS. That is hugely important. Our NHS was on its knees after 14 years of the last government. Now we’re bringing waiting times down. That is not easy, it requires decisions to be made, fair and necessary decisions of this Government, and I’m proud of that. That is an outcome of this Budget.”
He highlighted that the Government had increased headroom more than twofold, adding that “every business knows” its role in economic stability.
Mr Starmer added,
“On the substance of the Budget I’d defend it any day of the week. They’re the right steps for our country and I’m proud that we’ve taken them.”
Describing the welfare system as a “moral mission,” the Labour leader said almost a million young people should not be left without work or education.
He stated,
“Just as I fundamentally believe we’ve got to lift children out of poverty, that is a moral and personal mission for me, it always has been. So too I feel very strongly about the million young people.”
Mr Starmer continued,
“Unless we end up doing something, [they] could well end up spending the rest of their lives in that kind of dependency.”
The Prime Minister declined to say if he wanted the welfare bill to fall, pointing out its significant rise during the last government.
He added,
“But there is also what I would call a moral mission, being particularly concerned about young people, who are not in work and not learning, and over and above any other issue I think it’s a moral issue because I know, all the evidence points to this, that if you’re not earning and learning at that age, it’s going to be a lot more difficult to get into earning and learning later in your life.”
Commenting on the Budget, Mr Starmer said,
“Our choices were fair, they were necessary and they were fundamentally good for growth.”
He stated,
“But I will level with you. As the Budget showed, the path to a Britain that is truly built for all requires many more decisions that are not cost-free and they are not easy.”
The prime minister said,
“We can all see the challenge. An economy scarred by austerity, by Brexit and by consistently failing to unlock the nation’s potential. So we need a productivity revolution. And as our plan runs to the end of Parliament, I want to set out some of the next steps in our economic renewal so that our progress can be fairly judged.”
Mr Starmer promised voters tangible improvements to their lives in the coming year, adding he is confident the country has passed the narrowest part of the tunnel despite the ongoing cost-of-living challenges.
How does Starmer plan to reduce trade frictions with the EU?
Sir Keir Starmer said Britain must continue advancing its relationship with the European Union.
He stated,
“The Brexit deal we have [has] significantly hurt our economy. And so for economic renewal we have to keep reducing frictions. We have to keep moving towards a closer relationship with the EU. And we have to be grown-up about that, to accept that that will require trade-offs.”
The prime minister continued,
“We will keep going. We will continue to reject drift, to confront reality and take control of our future.”
Referring to the two-child benefit cap, the Labour leader said hospital staff welcomed its scrapping, highlighting that many children visit hospitals due to poverty in Britain today.
How did Chancellor Reeves respond to allegations of misleading ministers?
Chancellor Rachel Reeves confirmed she had not briefed her Cabinet on the more positive economic data she received.
According to The Times and Sky, top aides of Sir Keir Starmer accused him and Chancellor Rachel Reeves of misleading the Cabinet, with one unnamed minister calling the handling “a disaster from start to finish.”
They said,
“At no point were the Cabinet told about the reality of the OBR forecasts.”
Speaking at the Wales Investment Summit, the Chancellor said,
“You would never expect the Prime Minister and Chancellor to go through all the detailed numbers.”
She continued,
“The Cabinet are briefed on the morning of the Budget on the Budget numbers. Of course, we go through things that affect individual government departments, but the whole information of the Budget is not supposed to be provided until the Chancellor delivers the Budget. Obviously, this time, it was leaked early, but not by the Treasury.”
What did Kemi Badenoch say about Rachel Reeves and Labour’s control of the economy?
Conservative leader Kemi Badenoch said Rachel Reeves is not “in control” of the economy, arguing that the hard Left is driving government decisions.
She said “things could always get worse” under a different chancellor, but added that control lies with the backbenches, not Number 10.
When asked about the possibility of a more left-leaning successor to Ms Reeves, Ms Badenoch said,
“Things could always get worse.”
She continued,
“If I were Keir Starmer, I would be asking someone to stand down from their seat and get a sensible person who everybody in the country can have some faith in and put them in there and make them Chancellor. But they’re not going to do that.”
Ms Badenoch stated,
“Instead, they’re going to go through lots of different cycles of Labour MPs, some of whom are very similar to the ones that have gone to the Jeremy Corbyn party. You see what a rabble they are.”
She added,
“Labour are actually not that much different. The hard-Left on their backbenches is driving the car seat. So it doesn’t matter whether it’s Rachel Reeves or not, she is clearly not the one in control.”
Why has the UK scrapped the two-child benefit cap?
Rachel Reeves said she would not
“preside over a status quo that punishes children”
and that removing the cap will lift approximately 450,000 children out of poverty.
Research indicated the policy forced families to cut back on essentials like food and heating.
The Labour government describes the two-child benefit cap as a flawed and “pernicious” policy, saying it violates a core principle of the welfare state by denying support based on birth order rather than need.
The move comes after a year of intense internal debate within the Labour Party and external campaigning from charities, former Prime Ministers, and backbench MPs who argued that tackling child poverty was a fundamental mission.
What are the key measures in the UK 2025 Budget?
- National Insurance and income tax thresholds will be frozen for three extra years beyond 2028.
- The two-child benefit cap will be scrapped from April 2026.
- The legal minimum wage for over-21s will rise to £12.71 per hour in April.
- Properties worth more than £2 million in England will face a council tax surcharge.
- A new mileage-based tax for electric and hybrid vehicles will be introduced from 2028.
- Regulated rail fares in England will be frozen for 2026.
- The amount people can save in cash ISAs will be capped at £12,000 per year from 2027.
- Tobacco and alcohol taxes will rise above inflation, and the sugary drinks tax will be extended to milkshakes and lattes.