‘Of course I didn’t’ lie about budget forecasts, Reeves said<\/p>\n
Rachel Reeves said she \u201cof course\u201d had not lied about the state of the public finances before the budget. \u201cOf course I didn\u2019t,\u201d she told Trevor Phillips.<\/p>\n
Earlier, the chancellor had told his programme:<\/p>\n
\nIn the context of a downgrade in our productivity, which cost \u00a316bn, I needed to increase taxes, and I was honest and frank about that in the speech that I gave at beginning of November.<\/p>\n<\/blockquote>\n
Keir Starmer said on Thursday<\/a> that Reeves\u2019s \u00a326bn tax-raising budget had \u201ckept to our manifesto\u201d, but conceded that Labour had \u201casked everybody to contribute\u201d in the years ahead.<\/p>\n
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Updated at\u00a004.05 EST<\/p>\n
Key events<\/p>\n
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Budget 2025: key points at a glance<\/p>\n
My colleagues Rob Davies<\/a> <\/strong>and <\/strong>Rowena Mason<\/a> have done a useful explainer looking at the main points of the budget, which you can read here:<\/p>\n
Share<\/a>Badenoch says Reeves should resign as Labour is accused of breaking manifesto pledge<\/p>\n
Kemi Badenoch has reiterated her calls for the chancellor to resign on the BBC\u2019s Sunday with Laura Kuenssberg programme, after accusing Rachel Reeves<\/a> of breaking promises not to raise taxes.<\/p>\n
In this year\u2019s budget, Reeves froze tax thresholds <\/a>for three years longer than previously planned, meaning that as wages rise more people will have to start paying income tax.<\/p>\n
Labour promised in its 2024 general election manifesto that it would \u201cnot increase taxes on working people, which is why we will not increase national insurance, the basic, higher or additional rates of income tax, or VAT\u201d.<\/p>\n
Badenoch told the BBC this morning:<\/p>\n
\nThe chancellor called an emergency press conference telling everyone about how terrible the state of the finances were and now we have seen that the OBR had told her the complete opposite. She was raising taxes to pay for welfare.<\/p>\n
The only thing that was unfunded was the welfare payments which she has made and she\u2019s doing it on the backs of a lot of people out there who are working very hard and getting poorer. And because of that, I believe she should resign.<\/p>\n<\/blockquote>\n
Rachel Reeves (left) and Conservative leader Kemi Badenoch (R) appearing on the BBC\u2019s Laura Kuenssberg programme on Sunday. Photograph: Jeff Overs\/BBC\/PA Wire<\/p>\n
Badenoch added:<\/p>\n
\nThe shadow chancellor, Mel Stride, has written to the FCA (the Financial Conduct Authority). Hopefully there will be an investigation, because it looks like what she was doing was trying to pitch-roll her budget \u2013 tell everyone how awful it would be and then they wouldn\u2019t be as upset when she finally announced it \u2013 and still sneak in those tax rises to pay for welfare. That\u2019s not how we should be running this process.<\/p>\n<\/blockquote>\n
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Updated at\u00a005.28 EST<\/p>\n
Badenoch says the government has delivered a ‘budget for benefits’<\/p>\n
Conservative leader Kemi Badenoch<\/strong> has been interviewed by Trevor Phillips on Sky News. She said that Reeves\u2019 budget has made the nation poorer and that she \u201cshould be resigning\u201d having done a \u201cterrible\u201d job.<\/p>\n
Badenoch said:<\/p>\n
\nEvery single thing that Rachel Reeves did in that budget makes all of us poorer. There are a lot of people out there who are struggling. Go and look at the farmers, for instance \u2013 we\u2019re taxing farmers, many of whom are getting less than the minimum wage, to pay for benefits.<\/p>\n
We are taxing everybody now to pay for benefits. This was a budget for benefits. That is not the chancellor\u2019s job. That is not what she\u2019s supposed to be doing. Benefits are supposed to be a safety net, they\u2019re not supposed to make you middle-class.<\/p>\n
We are at a point now where the rider is getting heavier than the horse, we cannot afford this, and we are leaving debts for our children. That is not fair.<\/p>\n<\/blockquote>\n
Badenoch is calling for a reduction in the welfare bill, including around mental health benefits.<\/p>\n
Kemi Badenoch said Rachel Reeves was \u201cdoing a terrible job\u201d and \u201cshould be resigning\u201d. Photograph: Christopher Furlong\/Getty ImagesShare<\/a>Reeves says that growth is the government’s top priority<\/p>\n
Laura Kuenssberg said it is no longer \u201ccredible\u201d for the chancellor to say her number one priority is growth as the budget has made it more expensive for businesses to hire people and pushed up some business rates.<\/p>\n
The OBR forecasts the economy will expand by 1.5% this year, higher than the previous estimate of 1%.<\/p>\n
However, it lowered its growth estimates to 1.4% next year and 1.5% in the following four years.<\/p>\n
Reeves insists that growth is the top priority for the government, pointing to recent investments in the UK by firms including JP Morgan in London and Goldman Sachs in Birmingham as positive signs.<\/p>\n
She told the BBC:<\/p>\n
\n(The OBR) has assessed productivity over the last 14 years as having been lower than they previously expected. Now, I don\u2019t think that the Conservative legacy should define Britain\u2019s future. But I have got to show we can beat those forecasts. We\u2019ve beaten them this year \u2026 I am determined to beat those forecasts in the future.<\/p>\n<\/blockquote>\n
Growth expectations<\/a>Share<\/a><\/p>\n
Updated at\u00a005.29 EST<\/p>\n
Reeves says freezing tax thresholds was \u201cthe right thing\u201d to do to safeguard spending commitments, and investment in the NHS.<\/p>\n
Share<\/a>I don\u2019t accept that I misled the public, Reeves says<\/p>\n
Reeves is being interviewed by the BBC\u2019s Laura Kuenssberg. Rachel Reeves<\/a> was told the Treasury \u201cvery deliberately\u201d created the impression she had to put people\u2019s taxes up to fill a \u201cbig gap in the public finances that simply didn\u2019t exist\u201d.<\/p>\n
Asked if she misled the public in the run up to the budget by Kuenssberg, Reeves said:<\/p>\n
\nI do not accept that at all. The OBR numbers themselves, which I agree with and we knew they were going to be published, they are very clear that there was less fiscal space than there was just a few months ago in the spring. And we needed not less but more fiscal headroom \u2026<\/p>\n
Kuenssberg interrupts to say the chancellor didn\u2019t need an extra \u00a326bn in extra taxes to fill the fiscal black hole.<\/p>\n<\/blockquote>\n
Reeves added:<\/p>\n
\nThe numbers that you are using show that the headroom, the fiscal space, had deteriorated. That\u2019s exactly what those numbers show \u2026 And of course, that didn\u2019t include the policy choices that we had made between the spring and the autumn including on welfare and including on the winter fuel allowance \u2026<\/p>\n
I said when those policies changed just before the summer that we would have to find the money in the budget so I was very upfront about that.<\/p>\n<\/blockquote>\n
Tax receipts since 1940s<\/a>Share<\/a><\/p>\n
Updated at\u00a005.06 EST<\/p>\n
Reeves was also asked about her decision to scrap the two child benefit cap from next April, which is estimated to cost \u00a33bn a year by 2029-30.<\/p>\n
The move, which came amid intense pressure from Labour<\/a> backbenchers, was welcomed by campaigners and charities who argue it is the most cost-effective way to cut child poverty.<\/p>\n
The two-child limit prevents parents from claiming child tax credit or universal credit for more than two children.<\/p>\n
Asked whether the decision to remove the cap was in response to pressure from Labour MPs, Rachel Reeves<\/a> told Trevor Phillips:<\/p>\n
\nWe\u2019re choosing children. This lifts more than half a million children out of poverty, combined with our changes on free breakfast clubs, extending free school meals, 30 hours free childcare for working parents and preschool-age children \u2026<\/p>\n
The people I was thinking about were kids who I know in my constituency go to school hungry and go to bed in cold and damp homes, and from April next year those parents will have a bit more support to help their kids.<\/p>\n<\/blockquote>\n
Share<\/a>Reeves appears to back OBR chief despite watchdog’s shock leak<\/p>\n
Rachel Reeves\u2019s much-anticipated budget was undermined after the Office for Budget Responsibility\u2019s economic forecast appeared online <\/a>about 40 minutes before she announced her policies to the Commons.<\/p>\n
The chair of the Office for Budget Responsibility, Richard Hughes<\/strong>, has said he will continue to lead the watchdog unless he loses the confidence of the chancellor, the Treasury committee or parliament.<\/p>\n
The OBR\u2019s investigation into the leak is expected to report to the chancellor on Monday.<\/p>\n
Asked if Hughes\u2019 position is safe, Reeves said she will study the contents of the report tomorrow, but that she has a \u201chuge amount of respect\u201d for him and the budget watchdog.<\/p>\n
She told Sky News:<\/p>\n
\nWe will get a report tomorrow, the report that looks at what happened about that budget leak. It was clearly serious. It was clearly a serious breach of the protocol, but I\u2019ll see that report tomorrow.<\/p>\n<\/blockquote>\n
The OBR chair, Richard Hughes, has received the chancellor\u2019s backing despite the budget leak. Photograph: ReutersShare<\/a><\/p>\n
Updated at\u00a005.00 EST<\/p>\n
‘Of course I didn’t’ lie about budget forecasts, Reeves said<\/p>\n
Rachel Reeves said she \u201cof course\u201d had not lied about the state of the public finances before the budget. \u201cOf course I didn\u2019t,\u201d she told Trevor Phillips.<\/p>\n
Earlier, the chancellor had told his programme:<\/p>\n
\nIn the context of a downgrade in our productivity, which cost \u00a316bn, I needed to increase taxes, and I was honest and frank about that in the speech that I gave at beginning of November.<\/p>\n<\/blockquote>\n
Keir Starmer said on Thursday<\/a> that Reeves\u2019s \u00a326bn tax-raising budget had \u201ckept to our manifesto\u201d, but conceded that Labour had \u201casked everybody to contribute\u201d in the years ahead.<\/p>\n
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Updated at\u00a004.05 EST<\/p>\n
Rachel Reeves is speaking to Trevor Phillips on Sky News. He started by replaying a clip of the chancellor saying last year that Labour would not increase taxes further in a future budget. He says her statements turned out not to be true.<\/p>\n
Reeves defended this year\u2019s budget by saying it \u201cwas not on the scale of the one last year\u201d, adding that she had to ask people to \u201ccontribute more\u201d because the \u201ccontext\u201d had changed.<\/p>\n
Reeves said the OBR decided to do a review of productivity and said the watchdog\u2019s productivity downgrade did not reflect anything the Labour<\/a> government had done.<\/p>\n
Share<\/a>Chancellor to defend budget amid deepening row over deficit claims<\/p>\n
Good morning and welcome to our live coverage of UK politics. The chancellor, Rachel Reeves<\/strong>, has become engulfed in a politically damaging row about what she told the public about the state of the British economy ahead of last week\u2019s budget.<\/p>\n
Reeves had claimed that a downgrade to the UK\u2019s predicted economic productivity would make it more difficult to meet her self-imposed fiscal rules.<\/p>\n