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Downing Street denies claims that Rachel Reeves misled the public about a £20 billion black hole in the public finances
Kate Devlin,Bryony GoochSunday 30 November 2025 08:50 GMTComments
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Sir Keir Starmer will back the Budget in a speech next week after Downing Street dismissed claims Rachel Reeves misled voters over the scale of the fiscal challenge facing the UK.
The chancellor will face fresh scrutiny on Sunday’s media round over what she told the public and markets about the state of the economy.
It comes amid a growing row over pre-Budget speculation she faced as much as a £20 billion gap in meeting her fiscal rules. Ms Reeves used a speech on November 4 to suggest tax rises were needed because poor productivity growth would have “consequences for the public finances”.
But the Office for Budget Responsibility (OBR) on Friday said it had informed the Chancellor as early as September 17 that an improved tax take from growing wages and inflation meant the shortfall was likely smaller than initially expected, and told her in October it had been eliminated altogether.
Downing Street rallied around Ms Reeves, with a source saying the speech was “entirely accurate”. In an attempt to move the agenda on, Sir Keir will use a speech on Monday to support the decisions taken by Ms Reeves in the Budget and set out his long-term growth plans.
Meanwhile, shadow chancellor Sir Mel Stride has written to the Financial Conduct Authority (FCA) to urge it to investigate “potential market abuse” over the speech.
Key Points
- Reeves to face media as pressure grows in Budget row
- Reeves accused of misleading public on Budget black hole to justify £26bn tax raid
- Starmer to back Budget amid row over Reeves’ deficit claims
Reeves denies lying about shortfall
Rachel Reeves has said “of course, I didn't” lie after asked whether she lied to the public ahead of her budget.
“Look, I'm a Labour Chancellor. I want to reduce child poverty. I make no apologies for that. This will be the biggest ever reduction in child poverty in a parliament ever, and I'm proud to be the chancellor that lifts half a million kids out of poverty.
“That means kids not going to bed hungry. It means kids not waking up in cold and damp homes. And I am proud, and I'm very happy.”
Bryony Gooch30 November 2025 08:50Inflation to be 0.4 per cent lower next year, claims Reeves
Rachel Reeves claims her budget will reduce inflation next year.
“Because of the measures that I took in the budget, inflation is going to be 0.4 percentage points lower next year than they originally forecast because of our cost of living measures to reduce inflation, and so I needed to address [that] as well.
(Sky News Screenshot)Bryony Gooch30 November 2025 08:47Reeves says the budget lifted 450,000 children out of poverty
Rachel Reeves has said that the budget lifted 450,000 children out of poverty through her “fully costed and fully funded” budget.
“Well, one of the things I did in the budget was lift 450,000 children out of poverty. That was funded through cracking down on tax avoidance, more measures in the budget and introducing a gambling tax.
“I always said that to reduce child poverty, it had to be fully costed and fully funded. So the gambling tax and cracking down on tax avoidance and evasion was used to reduce child poverty.
“That was the right. I'm very happy to defend my choices on the cost of living, reducing child poverty, reducing NHS waiting lists, and building that financial resilience into our numbers.”
(Sky News Screenshot)Bryony Gooch30 November 2025 08:45Reeves explains why she went ahead with cuts
Rachel Reeves says that the £4bn headroom the Office of Budget Responsibility said she would have would not have been enough, which is why she decided to make cuts in the budget.
“The four, just over 4 billion pounds surplus was not enough. I said in that speech that I wanted to achieve three things in the budget, tackling the cost of living, which is why I took 150 pounds off of energy bills and froze prescription charges and rail affairs.
“I wanted to continue to cut NHS waiting lists, which is why I protected NHS spending, and I wanted to bring the debt and the borrowing, which is one of the reasons why I increased the headroom 4 billion pounds, the headroom would not have been enough and it would not continue to cut interest rates.”
Bryony Gooch30 November 2025 08:42Rachel Reeves speaks live on Sunday Morning with Trevor Phillips
We’ll bring you the top lines from Rachel Reeves’ interviews this morning.
Stay tuned.
Bryony Gooch30 November 2025 08:39Pictured: Rachel Reeves appears on Sunday Morning with Trevor Phillips
(Sky News Screenshot)Bryony Gooch30 November 2025 08:36Reeves to appear on Sunday morning round of politics shows
Rachel Reeves is set to appear on the morning round of politics shows today.
She’ll appear on Sunday Morning with Trevor Phillips from approximately 8.30am, and Sunday with Laura Kuenssberg from 9am.
Leader of the opposition Kemi Badenoch will also appear on the Sunday shows.
Bryony Gooch30 November 2025 08:18John Rentoul: Rachel Reeves is misleading people about her Budget choices
Rachel Reeves is misleading people about her Budget choices
Both chancellor and prime minister repeatedly fail to think and plan ahead, writes John Rentoul – not least in their choice of using the ‘l-word’, which has come back to haunt them as regards taxes and so much elseBryony Gooch30 November 2025 08:12Families on modest incomes could be £18k worse off after Reeves abolition of two-child cap - report
Families on modest incomes could be £18,000 worse off than jobless parents claiming benefits following Rachel Reeves’s abolition of the two-child cap in the Budget, an analysis in The Telegraph reported.
A family with three children that has at least one parent claiming the average rates of Universal Credit (UC), combined with other benefits, will receive up to £46,000 by next year, according to the Centre for Social Justice (CSJ).
Sir Iain Duncan Smith, chair of the CSJ and former leader of the Conservative party, said: “Getting welfare spending under control is critical. We must make work pay and, as this Government loses control of a ballooning welfare budget, it will ensure work does not pay.”
Bryony Gooch30 November 2025 08:05Tories and SNP call on City watchdog to look into 'misleading' Budget comments
Tory shadow chancellor Sir Mel Stride has reportedly written to the FCA urging it to look into “possible market abuse” arising from “misleading” comments and “the repeated disclosure of market-sensitive details of Budget decisions and the official forecasts”.
The leader of the Scottish National Party in Westminster, Stephen Flynn, also called on the City watchdog to launch an “immediate investigation into the accusations of false and deeply misleading Budget briefings”, questioning whether Ms Reeves’s November 4 speech amounted to “market manipulation”.
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