Early evening summary
Richard Hughes, the chair of the Office for Budget Responsibility, has quit after the findings of an urgent inquiry by the watchdog into how it inadvertently published Rachel Reeves’s budget 40 minutes early. In response, Reeves said in a statement.
I want to thank Richard Hughes for his public service and for leading the Office for Budget Responsibility over the past five years and for his many years of public service.
This government is committed to protecting the independence of the OBR and the integrity of our fiscal framework and institutions.
Keir Starmer has dismissed Tory claims that Reeves misled the public before the budget about the need for taxes to rise. In a speech and Q&A this morning, he also said the government would “keep moving towards a closer relationship with the EU”. (See 12.28pm.)
Evidence cited by police which led to the controversial banning of Maccabi Tel Aviv fans from a match against Aston Villa was based on facts changed to fit a decision, Lord Mann, the government’s adviser on antisemitism, told the Commons home affairs committee, the BBC reports.
On Radio 4’s PM programme, Douglas Alexander, the Scottish secretary, was asked if ministers wanted Richard Hughes to resign as chair of the OBR. Alexander said, as far as he was aware, it was an independent decision taken by Hughes himself.
Hughes pulls out of Treasury committee hearing tomorrow following his resignation as OBR chair
The Commons Treasury committee was due to be taking evidence from Richard Hughes tomorrow in his role as chair of the OBR. But, now he is the former chair of the OBR, he won’t be attending, the committee has said.
However the hearing will go ahead with the other two members of the OBR’s budget responsibility committee (its three-person leadership team), Tom Josephs and Prof David Miles.
In a statement, Meg Hillier, the committee chair, said:
On behalf of the committee, I want to thank Richard Hughes for approaching his work with dedication throughout his time as chair of the Office for Budget Responsibility – often in trying circumstances.
I commend his decision to take full responsibility for the incident and I wish him well for the future.
Some evidence suggests previous OBR reports may have been hacked early, without anyone knowing, Murray tells MPs
James Murray, the chief secretary to the Treasury, did not tell MPs that Richard Hughes would be resigning in his opening statement to MPs, or even make it clear that Hughes had lost the confidence of ministers (although he did later, around the time the resignation was being made public – see 4.33pm). But Murray made it clear that ministers were not minded to view this as an one-off mistake. He told MPs;
I can confirm to the house that the [OBR report into the mistake] goes on to make clear that this is a significant and longstanding issue that has allowed external users to gain early access to the OBR’s publication which contains full details of their forecasts and the chancellor’s budget.
In the days since the budget there has been speculation about what kind of error led to the economic and fiscal outlook being published. The report today confirms that the cause was not, and I quote, “simply, a matter of pressing the publication button on a locally managed website too early”.
The report concludes that the cause of the OBR’s error were systemic issues, and that … the problem exposed last week was not a new one.
More significantly, Murray told MPs that the report implies previous budgets may have been hacked earlier, without anyone knowing, as a result of flaw in the OBR’s system exposed in the report. He explained:
That market information should have been prematurely accessible to a small group of market participants is extremely concerning. That it might have been the case on more than one occasion is even more severe,
But I do want to share further information from the report with the house today. On the morning of the budget, the first IP address to successfully access the EFO [Economic and Fiscal Outlook – the budget report] had made 32 prior attempts that day, starting at around 5am.
Such a volume of requests implies that the person attempted to access documents had every confidence that persistence would lead to success at some point.
And this unfortunately leads us to consider whether the reason they tried to persistently access the EFO is because they have been successful at a previous fiscal event at this time.
We do not have the answers to all these questions, but I think we find the Treasury where we make the contacts of previous chancellors to make them aware of the developments that relate to previous fiscal events.
This is more alarmist than the OBR report itself, which says there is evidence that one person accessed the OBR’s 2025 spring statement report early, perhaps from a government-linked computer, and which calls for an investigation, but which does not make the argument that the person trying to find the report at 5am last Wednesday may have been an experienced hacker with malign intentions.
The James Murray statement on the OBR has just finished.
Before it wrapped up, the Labour MP Andrew Pakes welcomed the resignation of Richard Hughes. He said:
The leak of the OBR report makes deeply worrying reading, so I welcome the resignation of the chair of the OBR because leadership matters on these issues.
It turns out that the leak was not as unprecedented as we thought last week. As we have seen, they have leaked earlier documents and they may need to go back further in their look at it.
This could have led to speculation and costs running into millions for us.
In the Commons James Murray, the chief secretary to the Treasury, has just offered thanks to Richard Murray on behalf of the government for his public service.
But he did not say he was sorry to see him go. His opening statement (see 3.50pm) makes it clear that the government was determined to blame the error on longstanding problems linked to the OBR’s leadership.
Richard Hughes says budget mistake was 'technical but serious error' and he's resigning to help 'restore confidence in OBR'
Here is the letter from Richard Hughes to Rachel Reeves, the chancellor, and Meg Hillier, the chair of the Treasury committee, offering his resignation.
Richard Hughes has resigned as chair of OBR, MPs told
Murray tells MPs that Richard Hughes has resigned, he understands from messages passed to him.
Murray refuses to say Reeves has confidence in OBR chair Richard Hughes
Callum Anderson (Labour) asks if the chancellor has confidence in the head of the OBR.
Murray says the chancellor and everyone in the Treasury value the independence of the OBR. They are taking this matter seriously because they value its integrity, Murray says.
Paul Waugh (Lab) says the report implies that non-executive directors of the OBR do not have confidence in the leadership of the OBR.
Murray says that is a matter for the OBR itself.
Stephen Flynn, the SNP leader at Westminster, says someone put it to him on the train to London today that Rachel Reeves had been lying to the public. He suggested she should lose her job.
Barry Gardiner (Lab) asks if anyone at the OBR has offered their resignation, or if that has gone out of fashion.
Murray says that is a matter for the OBR.
Luke Murphy (Lab) says the Tories have gone from arguing that the public finances are in a terrible state to now saying that they are in a very good state.
Daisy Cooper, the Lib Dem spokesperson, says in Sweden the government publishes a draft budget that can be amended. She asks if the government has considered that here.
And she asks why in the budget speech last week the chancellor did not say that firms paying business rates would have to pay more because of revaluations. She says the average pub will pay £12,000 a year more.
On business rates, Murray says generous transitional relief is available.
Meg Hillier, the Labour chair of the Treasury committee, says she has been “saddened and troubled” by the number of budget leaks. She asks for an assurance that the government is looking at what can be done to ensure this does not happen again.
Murray says the government is taking this very seriously.
Murray is responding to Stride.
He says Stride is not acknowledging that the productivity downgrade was real.
Murray suggests that is because the Tories were responsible.
And he ends saying Reeves is not here because she is at the Wales Investment Summit. He says extra investment worth £1.4bn has been announced.
Stride is now talking about Rachel Reeves’s pre-budget speech.
He says we now know that the OBR was telling Reeves that the extra money she would get from tax revenue would more than compensate for the productivity growth downgrade.
He says that, when the Treasury was briefing before the budget that the new OBR forecasts had led to a significant worsening of the outlook, that was wrong.
He asks if Reeves approved those briefings.
He says it is “a matter of profound regret” that Reeves appeared on the media yesterday, but has not come to the Commons today.
Shadow chancellor Mel Stride says Reeves should not 'scapegoat' OBR
Mel Stride, the shadow chancellor, is responding now.
He says that he hopes Murray’s final words (see 3.50pm) do not mean Rachel Reeves is seeking to “scapegoat” the OBR.
Murray tells MPs government will respond to OBR's error 'with seriouness it demands'
Murray confirms the report did not find evidence of the involvement of a hostile actor.
The Treasury values the work of the OBR.
He says the government will respond to this with “the seriousness it demands”.
Murray tells MPs OBR report suggests someone may have successfully accessed budget documents early before
Murray says the OBR report admits this was the worst mistake in the OBR’s history.
The problem is a significant and long-standing issue, he says.
He says there has been speculation about what kind of error this was.
It was not a simple matter of a button being pressed early.
There were systemic issues, he says.
The OBR’s system was hacked in March.
The government takes this seriously, he says.
He says things like passwords were not used.
He says the report says that the weakness that caused this problem were pre--existing.
That market information should have been accessible is extremely concerning, he says.
He says the first IP address to access the document early stared at 5am. That suggests the person knew they would get in at some point. That implies they had done this before, he says.
The Treasury will be telling previous chancellor, he says.
Murray tells MPs that Reeves was upfront with the public about problems she faced ahead of budget
Murray says the chancellor was open with the public.
The chancellor said that the productivity downgrade caused a problem. It did. It led to a shortfall of £16bn.
The chancellor was clear she wanted more headroom.
The OBR told her that at she would be in surplus.
But that did not take account of the government needing to address its priorities.
He says the chancellor gave a speech ahead of the budget. She was being upfront with the public, he says.
James Murray, the chief secretary to the Treasury, is making his statement.
It is on two separate, but related, matters, he says.
He says he will speak about the government’s pre-budget communication with the public. Then he will talk about the OBR mistake.
James Murray, chief secretary to the Treasury, was meant to be giving his statement on the OBR budget error now.
But Lindsay Hoyle, the speaker, has suspended the Commons until 3.42pm because the statement arrived late. He is giving the opposition extra time to read it.
Main recommendations from OBR's report into accidental budget report upload
Here are the main recommendations from the OBR’s report into how its budget documents were accidentally made available to journalists early. It is recommending:
An investigation into whether this happened with previous OBR budget reports. The team compiling this report only had time to look at what happened at the time of the spring statement this year. One IP address accessed that March report half an hour before publication, but the report says that was probably a “benign” incident, involvinng someone within government.
that in future “completely new arrangements should be put in place for the publication of these major market- and time-sensitive documents”.
that the Treasury “in setting the OBR’s budget, pays greater attention to the need for adequate support to be provided and/or adequate expertise to be fully funded”.
that other government agencies review how they handle sensitive information when publishing it on their websites.
The OBR in its report on the budget “leak” says that it does not know what impact the early release of the budget document had on trading in the City. It says:
It is not within our competence to say what market movements between 11:30, (when the document was uploaded in pre-publication form but was unintentionally accessible) and 13:38 (when the chancellor concluded her budget statement) were affected by the achievement of early access to EFO material. We note however that those who secured early premature access did, at least, disseminate it quickly and widely, through the use of such mechanisms as Reuters alerts, rather than keep it for their private advantage.
Here is the passage in the OBR report explaining what happened in the 50 minutes after Reuters first published a snap news alert based on what was in the budget document it had accessed. It shows that at one point staff could not take it down because the traffic to it was so high. Another problem was that it ended up on the internet archive.
What OBR say about why its budget report was inadvertently made available early to journalists
The OBR report explains how its budget report was made available early to journalists by mistake.
It is a relatively simple story. The OBR is a small department, with just 52 permanent civil servants. It does not have its own IT department. It publishes material on its website using WordPress. Its staff upload material, but for budgets, and other days when important OBR documents are being published, an external developer is brought in upload material, because there will be a high demand the moment the documents are published.
At the OBR it was assumed that the pre-publication uploads would not be generally accessible because “even though the URL could be guessed because it followed a clear pattern from previous EFOs, the protections provided on WordPress would ensure it could not be accessed”.
That assumption turned out to be wrong.
The report says from 11.30am the web developed starting uploading the budget documents to the draft area of the website, which was thought to be private.
At 11.35am the first successful attempt to access that address was made.
At 11.41am Reuters ran its first news alert based on what the report said.
Treasury on OBR report: 'Chief secretary will respond in due course'
Maybe Richard Hughes is not safe yet.
This is the statement the Treasury has just released in response. A Treasury spokesperson said:
We thank the Office for Budget Responsibility for their report. The chief secretary to the Treasury will respond in due course.
James Murray, chief secretary to the Treasury, is addressing MPs at 3.30pm.
OBR publishes report into its inadvertent release of budget report, saying it is 'worst failure' in its 15-year history
The Office for Budget Responsibility has now published its report into the “leak” of the budget on its website.
Here is an extract.
We are in no doubt that this failure to protect information prior to publication has inflicted heavy damage on the OBR’s reputation. It is the worst failure in the 15-year history of the OBR. It was seriously disruptive to the Chancellor, who had every right to expect that the EFO would not be publicly available until she sat down at the end of her Budget speech, when it should, as is usual, have been published alongside the Treasury’s explanatory Red Book. The Chair of the OBR, Richard Hughes, has rightly expressed his profound apologies.
It is also important to note that the EFO contains market-sensitive information, i.e. information that is not public and could have a material impact on financial markets. This is why, in the run-up to the delivery of the Budget, any leaks concerning the OBR’s forecasts, whether accurate (as in this case) or inaccurate, whether inadvertent (as in this case) or deliberate, are to be greatly deplored. They must be taken very seriously by institutions from which leaks emerge. As evidence of the seriousness with which the OBR takes this issue, we have noted that throughout the preceding months the OBR had stuck rigidly to the principle of confidentiality. It is beyond the scope of this report to assess what specific factors exerted what degree of influence on the financial markets on the morning of the Budget, but we are confident that the OBR will co-operate with the Financial Conduct Authority with respect to any information it might seek.
As of now, Richard Hughes, the OBR chair, has not resigned.
Former Tory MPs Jonathan Gullis, Lia Nici and Chris Green defect to Reform UK
A former Tory deputy chair has defected to Reform, saying that his old party has “lost touch” with voters, PA Media reports. PA says:
Jonathan Gullis, who also served as an education minister before the last election, is one of three former Conservative MPs to join Nigel Farage’s party in the latest round of defections.
A Reform source confirmed to PA earlier that Lia Nici, who served as Grimsby MP until last year, and former Bolton West Tory MP Chris Green, have also joined “on their own accord online”.
The latest round of defections are the first since Danny Kruger, the sitting MP for East Wiltshire, left the Tories to join Reform in September.
In a post on his Facebook page, Gullis, the Conservative MP for Stoke-on-Trent North between 2010 and 2024, said he had not taken the decision to defect “lightly”.
He said: “Over time, I have watched a party I once believed in lose touch with the people it was meant to serve.
“From failing to control both legal and illegal migration to pursuing a net zero agenda that has seen a rise in our household energy bills and put jobs in Stoke-on-Trent’s world-famous ceramics sector at risk, the Conservative party has understandably lost the trust of the British people.
As a country, we face serious and deep-rooted challenges, and what is required now are bold, radical ideas alongside the determination to deliver them.”
A Reform source said: “The Conservative party is dead. Only Reform can beat Labour at the next election as the polls show time and time again.”
There are now at least 17 former Tory MPs who have joined Reform UK. That list does not include Danny Kruger, who was elected as a Conservative at the last election, but who defected to Reform UK in September.
Ed Davey, the Lib Dem leader, has responded to Keir Starmer’s speech (see 12.13pm) by urging the PM to explicitly back a customs union with the EU. Davey said:
Keir Starmer’s speech talked about boosting growth but he is refusing to do the single biggest thing to achieve that – fixing our trade with the EU through a new customs union.
The prime minister’s own economic adviser has reportedly told him that a customs union would be one of the most effective ways to boost growth – but it seems he ignored her.
Your Party adopts 'targeted' strategy for where it will run candidates, making pact with Greens more possible
Ben Quinn is a senior Guardian reporter.
Members of Your Party have taken a step towards an electoral alliance with the Greens after voting to adopt a “targeted” strategy of only standing in seats where the new leftwing movement founded by Jeremy Corbyn and Zarah Sultana has a good chance of winning.
While no such pact is currently in place, the decision not to have a strategy of trying to maximise the number of Your party candidates could play a role in some key battlegrounds in next year’s local elections where the vote to the left of Labour would otherwise have split.
They include Hackney, traditionally a Labour stronghold, but where Green councillor Zoë Garbett is hoping to build on momentum behind her party and succeed next year on her third attempt at winning the borough’s mayoral election.
Other results that have been released from voting at the weekend at the first inaugural conference of Your party meanwhile commit the new movement to endorsing leftwing “community independents” in English local elections next year.
Independent leftwingers have won increasing numbers of seats in recent years, amid defections from Labour over domestics policies, but also particularly, as a result of positions taken by its leadership in relation to Gaza.
The results were released after a weekend when members voted to formally adopt the name Your Party, the placeholder which had been used after its launch earlier this year, although continuing internal divisions played out as Sultana boycotted the first day.
The stances of Your Party members for the Holyrood and Senedd elections next year will be decided democratically by members in each nation in the coming weeks, alongside the party’s structures in Scotland and Wales respectively.
John Swinney says Reeves should resign, arguing she 'quite clearly misled public'
Libby Brooks is the Guardian’s Scotland correspondent.
John Swinney, Scotland’s first minister, has called for Rachel Reeves to resign, saying the chancellor must “face the consequences” after she “quite clearly misled the public and the financial markets”.
Swinney weighed in on the growing row about whether Reeves deliberately misled voters when she warned about the impact of lower growth forecasts by the Office for Budget Responsibility.
He told BBC Scotland News:
She had information from the Office for Budget Responsibility that indicated that the financial challenges that she faced were not as great as she presented them to be.
If the public cannot rely on the chancellor being straight with them, then I don’t know how we can function in our governance.
So I think Rachel Reeves has got to face the consequences of misleading the public in the way that she has.
Last week Reeves said her decisions would release an extra £820m in funding for the Scottish government over the next three years. The funding boost, as well as the scrapping of the two-child limit, was welcomed by Scottish Labour who hope the package may go some way to assuaging voter anger with Keir Starmer and Rachel Reeves ahead of next May’s key Scottish parliament elections.
Updated
Rachel Reeves has said she is absolutely confident that she will still be chancellor at the time of the next election.
At the Wales Investment Summit, asked by PA Media how confident she was about keeping her job until the election, she replied:
I’m absolutely confident.
I set out in a speech a couple of weeks before the budget that the ambition for the budget was to cut NHS waiting lists, cut the cost of living, and cut the debt and the deficit. We’ve achieved all of those things.
James Murray, chief secretary to Treasury, to make Commons statement about OBR forecasts at 3.30pm
James Murray, the chief secretary to the Treasury, will give a statement to MPs about the OBR forecasts. It will come at 3.30pm.
The opposition were planning to table an urgent question on the OBR information released on Friday (which has prompted the claims that Rachel Reeves misled the public about the need for tax rises), and it is likely that the Treasury agreed to schedule a statement knowing that, if they did not, the speaker would grant a UQ.
Updated
Reeves rejects criticism from unnamed cabinet ministers that she wrongly withheld OBR forecasts from them
Rachel Reeves, the chancellor, has denied misleading cabinet colleagues about the state of the public finances ahead of the budget.
This morning the Times quoted an unnamed cabinet minster as saying “at no point were the cabinet told about the reality of the OBR forecasts”. (See 9.28am.) Beth Rigby from Sky News says she has heard the same from a cabinet minister.
I was also told by a cabinet minister this morning (as per @Steven_Swinford’s @matt_dathan) they feel misled over the framing of the public finances in the run up to the Budget
Speaking to BBC Wales at the Wales Investment Summit today, Reeves dismissed this claim. She said ministers would not expect to be told given all the information about the budget forecasts in advance.
You would never expect the prime minister and chancellor to go through all the detailed numbers.
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.
Starmer's speech - snap verdict
For a while the only news happening on a Monday morning was the regular Reform UK press conference. There has been no sign of Nigel Farage this morning (although his party has announced the defection of a former Tory MP), but Keir Starmer and Kemi Badenoch have both been doing media events. Starmer is probably reasonably pleased with the way his went. There were four points that stood out.
1) Starmer pushed back fairly confidently against claims that Rachel Reeves misled the public about the state of the public finances ahead of the budget. During the Q&A he said:
There was no misleading, and I simply don’t accept, and I was receiving the numbers, that being told that the OBR productivity review means you’ve got £16bn less than you would otherwise have had shows that you’ve got an easy starting point.
Yes, of course, all the other figures have to be taken into account. But we started the process with significantly less than we would otherwise have had.
Starmer’s argument is unlikely to impress his media critics (see 9.53am), or Kemi Badenoch (see 10.29am). But it will hold up with more reasonable observers, and this was not one of those press conferences where the press pack is in full pursuit and the PM is on the run because there is a legitimate scandal that won’t go away. Reeves feels safe.
2) But Richard Hughes, chair of the Office for Budget Responsibility, looks a lot more vulnerable. Starmer claimed that he supported the OBR as an institution (see 11.14am), and this sounded sincere; the government passed a law last year beefing up the status of the OBR (to make a point about Liz Truss), and so he would say that. But he also publicly said the OBR should have carried out its productivity review at the end of the last parliament, and he refused to defend its decision to publish its pre-budget advice to the Treasury on Friday. He also talked up the significance of the pre-budget leak, even though in the end it had no practical impact. (See 11.14am.) This afternoon the OBR will publish its report on that affair. It is not impossible that Hughes could have to resign.
3) Starmer said the government would “keep moving towards a closer relationship with the EU”. (See 12.13pm.) In policy terms, this sounded like the most important passage of the speech. There is one very obvious policy that would bring the UK closer to the EU, and boost growth: joining the EU customs union (which is Lib Dem policy). Starmer did not propose this. But, a good article in the Observer yesterday, Rachel Sylvester said Starmer had his team did discuss this option as the budget was being prepared. She said:
The prime minister’s economic adviser [Minouche Shafik] also suggested that rejoining the EU customs union would be one of the most effective ways of generating growth.
Sylvester says this idea was “quickly knocked back”. But today Starmer is saying he wants to go further than what has already been agreed, and he said this would ultimately “require trade-offs”.
4) Starmer did sound a bit more shaky on welfare. He did make this a theme of his speech. But, in policy terms, his thinking on this sounded quite sketchy and, with the opposition making welfare spending one of their key attack lines, Starmer came across as someone who needs a better idea of what he wants to achieve, and how to defend it.
Updated
Starmer says UK has to 'keep moving towards closer relationship with EU'
This is what Keir Starmer said about Brexit, and relations with the EU, at the end of his speech. (See 10.48am.)
Let me be crystal clear; there is no credible economic vision for Britain that does not position us as an open, trading economy.
So we must all now confront the reality that the Brexit deal we have 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 this will require trade-offs.
That applies to our trading relations right across the world and, as you’ve seen already with this government, there are deals to be done if you’re committed to building relationships.
That’s what we’ve done with the US, it’s what we’ve done with India, and it’s what we’ve done with the EU, and we will keep going.
We will continue to reject drift, to confront reality and take control of our future.
The final two questions at the press conference went to “influencers” – Chris Chandler who does News with Chris on TikTok, and News ASB Andrew.
Q: [From Chandler] What reassurance can you give families struggling this winter?
Starmer said he would assure them the government is helping to keep bills down this winter. Rail fares and prescription charges are being frozen, and energy bills are being cut, he said.
Q: [From Andrew] Will you be transparent about the fiscal realities, even if the news is politically inconvenient?
Starmer said he had been explaining his decisions today. Hopefully that helped to explain the process, he said.
And that was the end of the press conference.
Starmer declines to say if he expects welfare spending to be falling by time of next election
Q: To return to the question Chris Mason asked (see 10.52am), do you want to see welfare spending falling by the time of the next election?
Starmer said he has two reviews looking at welfare spending. The last government “lost control of welfare spending”, he said.
He defended getting rid of the two-child benefit cap. And he said he was struck, visiting a hospital last week, how staff linked poor child health explicitly to poverty.
But he did not say whether or not he wanted overall welfare spending to be falling by the time of the next election.
(At the time of the proposed welfare reforms that had to be abandoned in the summer, ministers were not saying they would lead to spending on benefits falling by the time of the next election. But they did say the reforms would stop spending rising as much as it would without them.)
Q: Are you confidence Labour MPs will support welfare reform?
Starmer said that he saw this was a moral question. He repeated his point about being worried about young people being excluded for good from the workplace.
Starmer claims to be 'supportive' of OBR, but says it should have published productivity review at end of last parliament
Q: You are clearly very angry with the OBR over the timing of its productivity review. If it does not command your confidence, what is the point of the OBR?
Starmer denies being “angry”.
He says it is a good thing that reviews like this are carried out.
But he says it would have been better if that has been carried out at the end of the last parliament. He says he feels as if he has been “picking up the tab for the last government’s failure”.
He says he is “very supportive” of the OBR.
But he says the release of the budget document by mistake was “a massive discourtesy to parliament”.
UPDATE: Starmer said:
Well, I’m not angry at the productivity review.
It’s a good thing that reviews like that have done from time to time. I’m bemused.
Myself, I feel that doing at the end of last government and before we started might have been a good point to do a productivity review so we could know exactly what we were confronted with.
Doing it 15, 16, months into a government, it had to be done sometime, but picking up the tab for the last government’s failure – it’s been the nature of the beast, frankly, for the last 16 months, but it was given a special emphasis in that exercise.
I’m not angry, I’m just bemused as to why it wasn’t done at the end of the government rather than done now, but I’m not saying that these reviews aren’t important et cetera …
I’m not going to suggest that what happened last week, which was the entire budget being published before the Chancellor got to her feet, was not anything other than a serious error.
This was market sensitive information. It was a massive discourtesy to parliament. It’s a serious error, there’s an investigation that’s going on.
But as for the OBR itself, I’m very supportive of the OBR for the reasons I’ve set out – vital for stability, vital and integral to our fiscal rules, which I’ve said a number of times are ironclad.
Updated
Starmer declines to defend OBR's decision to publish on Friday its pre-budget advice to Treasury
Q: Wasn’t it misleading for Reeves to talk about the productivity downgrade when she had been told she was heading for a budget surplus? And was it right for the OBR to reveal on Friday all its advice to the Treasury?
Starmer repeats his point about not accepting the Reeves was misleading.
And he says it is for Richard Hughes, the chair of the OBR, to explain why he published those figures.
Updated
Starmer questions why OBR chose to carry out productivity growth review when Labour came to power, not before
Q: [From Christopher Hope from GB News] How can our viewers trust anything that you say?
Starmer says the government started the budget process in a bad way. Having £16bn less than expected was “a very bad starting position”.
He queries why the OBR decided to review productivy growth when Labour came to power, when it had not done that earlier, but then suggests that is something he just has to accept.
Robert Peston, ITV’s political editor, goes next. He says he has covered budgets for 35 years and never known one this shambolic, apart from Liz Truss’s.
Starmer defends the budget. The NHS was on its knees when Labour came in, he says. And he says when he visited a hospital afterwards and said the government was cutting £150 off energy bills. Nurses clapped at that point, he says. He says he is proud of that.
Q: What are you going to do to improve links with the EU?
Starmer says he negotiated a reset deal with the EU. And he says a new SPS deal should cut food costs.
'There was no misleading' - Starmer defends Reeves against claims she was not honest about about pre-budget state of public finances
Q: [From Beth Rigby from Sky News] Reeves did mislead people because she told people about the productivity downgrade without telling people that other revenues offset that. A cabinet minister told me this morning they felt misled.
Starmer does not accept that. He says:
Look, there was no misleading, and I simply don’t accept – and I was receiving the numbers – that being told that the OBR productivity review means you’ve got £16bn less than you would otherwise have had shows that you’ve got an easy starting point.
Yes, of course, all the other figures have to be taken into account. But we started the process with significantly less than we would otherwise have had.
He says:
Starting that exercise with £16bn less than we might otherwise have had – of course, there were other figures in this, but there’s no pretending that that’s a good starting point …
To suggest that a government that is saying that’s not a good starting point is misleading is wrong in my view.
Updated
Starmer is now taking questions.
Q: [From the BBC’s Chris Mason] Was Rachel Reeves open about the state of the economy? And do you want welfare spending to fall?
Starmer says the productivity downgrade meant the Treasury needed to raise £16bn more than it would have done without that.
He says the government was always going to have to raise extra money.
At one point he thought they would have to breach the manifesto promise on tax.
He asks if there were alternatives. There were alternatives, and that did not need to happen.
On welfare, Starmer says is particularly concerned about young people who are not earning or learning. He says there a moral element to this.
UPDATE: Starmer said:
There was a point at which we did think we would have to breach the manifesto in order to achieve what we wanted to achieve. Later on, it became possible to do it without the manifesto breach.
Given the choice between the two, I didn’t want to breach the manifesto, and that’s why we came to the decisions that we did.
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Starmer then mentions the need for welfare reform. (See 9.28am.)
And he ends by saying it is necessary to admit that the Brexit trade deal has harmed the economy. He calls for closer economic ties with the EU.
Starmer says he wants to use the rest of his speech to talk about the next steps for economic renewal.
First, he turns to regulation – and mentions the report from the nuclear regulatory taskforce last week.
That mentioned “pointless gold plating, unnecessary red tape, well intentioned but fundamentally misguided environmental regulations” and said Britain awas the most expensive place in the world to build nuclear power.
He says he wants the government to cut this sort of regulation.
Starmer says he is confident UK can 'beat the forecasts' on growth
Starmer says the measures in the budget are not just about helping people with the cost of living; they are about giving people security too, he says.
On growth, he says:
When it comes to economic growth, better living standards, we’re confident we can beat the forecasts. We’ve already beaten them this year.
We are in control of our future. We’ve already struck trade deals. They’re attracting billions of pounds of investment. We’re removing barriers to business right across the economy in planning, industrial policy, pension reform, artificial intelligence, capital investment and right at the heart of the budget we have a package of measures to keep the green light for the world’s best entrepreneurs.
That is why the budget was good for growth, he says.
Starmer says Britain has now 'walked through narrowest part of the tunnel'
Starmer says Labour had a difficult inheritance.
But if you’d said to me 17 months ago, on the first day of government, that by now we would have cut NHS waiting times, cut immigration, cut child poverty by a record amount, if you’d said to me that Britain would now be cutting borrowing faster than any other G7 country without cutting public investment, that our fiscal headroom is up significantly, economic growth is beating the forecast, with wages up more since the election than in a decade of the previous government …
If you’d said to me, because of all that, we can tackle the cost of living for working people, freezing rail fares, freezing prescription charges, freezing fuel duty, slashing childcare costs, driving down mortgages, taking £150 off your energy bills, £300 for poorer households – then I would say yes, that is a record to be proud of.
Starmer goes on:
Because we confronted reality, we took control of our future and Britain is now back on track.
But I’m also confident we have now walked through the narrowest part of the tunnel.
Starmer says Labour ruled out cutting spending or raising borrowing because those options have been 'tested to destruction'
Starmer says at the budget the government could have borrowed more, or cut public services.
But those ideas have been “tested to destruction”, he says.
Starmer says he is 'proud' of budget, especially taking 500,000 children out of poverty
Keir Starmer is speaking now.
He says he remembers when he was growing up his family having the phone cut off because they could not pay the bill. So he is proud the budget took steps to cut child poverty, he says.
[Not being able to pay bills] is still the reality of Britain for far too many people.
So yes, I am proud. I’m proud we scrapped the two-child limit. I’m proud of lifting over half a million children out of poverty. Proud we raised the national minimum wage again. That is what a Labour government is for – making life better for working families.
Q: Reform would review the triple lock. Would you?
Badenoch says the triple lock is Conservative policy. It does cost a lot, she says. But getting rid of it would not help growth, she says. She says you can get rid of it, “and we can all get poorer together”.
She says Reform UK don’t have serious policies.
The real problem with welfare is that not enough people are working, she says.
Q: Yesterday you said Rachel Reeves was lying. Today you are saying she gave out false information. Are you still accusing her of being a liar?
Badenoch replies: “Yes.”
At the Tory event, Kemi Badenoch was asked if she would like to take responsibility for the Conservative’s party role in the productivity downgrade.
Badenoch said there was a problem with public sector productivity when the Tories were in office. She said the problem was associated with Covid. She claimed that her party accepted there was a problem and adopted some “humility”.
Mel Stride, the shadow chancellor, said that the government also put up public sector pay without demanding productivity improvements.
OBR to publish report on accidental budget 'leak' at 2.30pm
The Office for Budget Responsibility has said that at 2.30pm today it will publish its report on how its budget report was accidentally uploaded to a place on its website where it could be accessed early by journalists on budget day.
Mel Stride, the shadow chancellor, is speaking at the Tory event now. He says the Treasury briefing ahead of the budget deflate the “animal spirits” in the economy, holding back growth.
He claims that the Tory plans to cut spending by £47bn are robust, and have stood the test of time since the party’s conference.
Badenoch restates her call for Reeves to resign
Kemi Badenoch is speaking at an event in London now.
She restates her claim that Rachel Reeves should resign. She claims the chancellor gave people a misleading view of the financial picture because she wanted a “soft landing” for her budget. She said that private company would not be allowed to misrepresent its finances in this way.
Here are two of the most level-headed members of the Westminster commentariat making the point that the Rachel Reeves feeding frenzy (see 9.53am) is getting a bit out of hand.
This is from Heather Stewart, the Guardian’s economics editor (and former political editor) on Bluesky.
This story is starting to make me feel I’m going slightly mad - maybe RR overdid the gloom, but the tax rises are paying for a) the welfare U-turns b) the £10bn-plus increase in headroom c) scrapping the two child limit d) bits of other spending eg higher local gov costs 🤷🏻♀️
And this is from the Economist’s Matthew Holehouse.
It was the most botched budget briefing since Truss… but this is increasingly wild. It is not an unsubstantiated “claim” that the OBR priced the productivity downgrade at £16bn in foregone revenue!
What papers are saying about Rachel Reeves
Many of the papers have gone to down this morning on the claims that Rachel Reeves misled the public abouit the state of the public finances ahead of the budget.
Here is the Times’s splash, as referred to earlier. (See 9.28am.)
Here is the Daily Mail and the Daily Telegraph, both highlighting an intervention from Nigel Farage (who has not hitherto been noted for his keen interest in ethical standards in public life).
The Daily Express has led with Kemi Badenoch’s words on this story.
And the Metro is leading with Reeves’s words.
Bangladesh court sentences UK MP Tulip Siddiq to two years in prison in absentia
A court in Bangladesh has sentenced the British MP Tulip Siddiq to two years in jail after a judge ruled she was complicit in corrupt land deals with her aunt, the country’s deposed prime minister Sheikh Hasina. Hannah Ellis-Peterson has the story.
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Starmer to defend Reeves after claims that some ministers feel she misled them ahead of budget
Good morning. At Westminster there used to be a theory about budgets that, if they were well received on the day, they tended to go wrong later, but the ones that were widely criticised at the time turned out to be the good ones. This does not help with Rachel Reeves’s budget though, because its reception has been very mixed. On the day it was popular with Labour MPs and with the bond markets, two important audiences for the Treasury. But the public at large believe it was unfair, and it has result in Reeves’s approval ratings with voters, which were already very low, sinking further.
And that was before a huge row erupted over whether or not Reeves misled voters about the extent of the “black hole” in the national finances.
All this means that, when Keir Starmer gives a speech today defending the budget, he will have to respond to Tory claims that she should be sacked for lying – not the best backdrop for a PM trying to sell a budget to the public.
Starmer has given a flavour of what he will say in an article for the Guardian and Kiran Stacey has written it up in our splash story here.
Judging by his article, Starmer will in part be trying recalibrate the budget message by addressing two criticisms that were being levelled at it last week. First, it was pointed out that Reeves said very little in it about promoting growth, even though this is supposedly the government’s top priority. Today Starmer will stress his commitment to deregulation as a pro-growth initiative.
And, second, Reeves was criticised for increasing spending on welfare without combining that with announcements about welfare reform. Today, without giving details, Starmer will insist his commitment to welfare reform is strong. Referring to the need to stop young people getting trapped on sickness or disability benefits, he will say:
We have to confront the reality that our welfare state is trapping people, not just in poverty, but out of work. Young people especially. And that is a poverty of ambition. And so while we will invest in apprenticeships and make sure every young person without a job has a guaranteed offer of training or work.
We must also reform the welfare state itself – that is what renewal demands. Now – this is not about propping up a broken status quo.
No, this is about potential. Because if you are ignored that early in your career. If you’re not given the support you need to overcome your mental health issues, or if you are simply written off because you’re neurodivergent or disabled, then it can trap you in a cycle of worklessness and dependency for decades.
Which costs the country money, is bad for our productivity, but most importantly of all - costs the country opportunity and potential.
This is from an extract from the speech released by No 10 in advance.
But, without specifics, Starmer won’t stop the media asking about the claims that the Treasury’s pre-budget messaging was misleading. According to a story in the Times, even some ministers are saying this in private. The Times story includes this quote.
One cabinet minister said: “Why did Keir and Rachel allow the country to believe for so long that we would break our manifesto by putting up income tax by 2p when they would have known that wasn’t true?
“At no point were the cabinet told about the reality of the OBR forecasts. Had we been told, we might have been in a position to advise against setting hares running on income tax and giving the public the impression we are casual about our manifesto commitments. The handling of this budget has been a disaster from start to finish.”
Darren Jones, the Cabinet Office minister and chief secretary to the PM, has been defending the chancellor in interviews this morning. His line has been the same as Reeves’s yesterday; that she did not mislead anyone about the black hole because, even if though the Treasury did not tell the public that the problems caused by the producivity downgrade (which Reeves did talk about) were offset by higher-than-expected tax revenues (which she did not talk about), she still needed to put up taxes to create proper headroom. The surplus revealed by the OBR on Friday would not have been enough, Reeves and Jones have said.
Here is the agenda for the day.
10am: Kemi Badenoch speaks at a Q&A in London. It is being hosted by the broadcaster Liam Halligan, and Mel Stride, the shadow chancellor, and Andrew Griffith, the shadow business secretary, are also taking part.
10.30am: Keir Starmer gives a speech in London on the budget.
1.30pm: Lord Mann, the government’s independent adviser on antisemitism, gives evidence to the Commons home affairs committee about the decision to ban Maccabi Tel Aviv fans from the Europa League match in Birmingham. At 2.30pm Craig Guildford chief constable at West Midlands police, Mike O’Hara, asistant chief constable at WMP, and Simon Foster, the West Midlands police and crime commissioner; and 3.30pm Sarah Jones, the policing minister, gives evidence.
2.30pm: Bridget Phillipson, the education secretary, takes questions in the Commons.
After 3.30pm: A minister may be required to answer an urgent question about the OBR’s statement about the pre-budget forecasts it gave to the Treasury.
3.45pm: Downing Street holds a lobby briefing.
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