Chancellor Rachel Reeves has rejected claims that she misled the public about the state of the UK’s finances before announcing her Budget.
Speaking on BBC One’s Sunday with Laura Kuenssberg, she insisted she has been honest and transparent about her decisions.
Reeves had repeatedly warned that the UK’s productivity forecast had been downgraded, suggesting there was less money available.
However, it later emerged that the Office for Budget Responsibility (OBR) told her in mid-September that the public finances were actually stronger than expected.
When challenged, she said she did not accept that she misled anyone. She argued that she has always been upfront about her plans, before and after the general election.
Conservative leader Kemi Badenoch disagreed, accusing the chancellor of giving a gloomy picture of the economy to justify tax increases.
She called on Reeves to resign, claiming the chancellor “lied to the public”.
Downing Street defended Reeves, saying she did nothing wrong. Prime Minister Keir Starmer is expected to publicly support her decisions, which he says will help tackle inflation and the cost of living.
During the interview, Reeves explained that the OBR had reduced her budget headroom and the extra money available from £9.9bn in spring to £4.2bn in the autumn.
She said this was too little to safely run the economy, so she made decisions that increased the headroom to £21.7bn.
Reeves also defended her decision to scrap the two-child benefit limit, saying it was fully funded through higher online gambling taxes and measures against tax evasion. She said the policy will lift 500,000 children out of poverty.
Badenoch criticised this, saying Reeves should have cut welfare instead of raising taxes. She accused the chancellor of exaggerating the financial situation to justify her plans and claimed this could amount to “market manipulation”.
Conservative shadow chancellor Mel Stride has written to the Financial Conduct Authority calling for an investigation.
