Tax Debate: Starmer Stands by Reeves Amid Budget Controversy

British Prime Minister Keir Starmer defends finance minister Rachel Reeves against accusations of misleading the public before a budget announcement. Despite initial forecasts requiring tax hikes, Reeves avoided breaking key manifesto pledges. Controversy arose after the fiscal watchdog showed the government knew of potential stronger tax revenues.

British Prime Minister Keir Starmer has publicly defended Finance Minister Rachel Reeves amidst allegations that she misled the public in the lead-up to the budget announcement. Speculation over potential tax hikes dominated the pre-budget discussions, suggesting a breach of election pledges might be necessary.

During the November 26 budget, Reeves managed to introduce a £26 billion ($34 billion) tax increase without contravening specific Labour Party manifesto commitments, notably avoiding hikes in key areas like income tax. Post-budget, Reeves faced backlash for purportedly exaggerating fiscal weaknesses before the fiscal watchdog revealed the government anticipated stronger tax revenues.

Starmer clarified that the budget process, including adjustments in productivity forecasts, made some form of tax increase unavoidable. He acknowledged an initial belief that breaching the manifesto might be required, but later developments showed it could be avoided. Starmer reiterated that Reeves did not mislead the public.

(With inputs from agencies.)