Prime Minister Keir Starmer faced sustained and often heated questioning in the Commons this morning as Conservative leader Kemi Badenoch opened Prime Minister’s Questions with accusations that the chairman of the Office for Budget Responsibility had been forced out for exposing Labour’s tax plans.
Richard Hughes resigned on Monday after the OBR published details of the Chancellor’s financial plans ahead of the Budget.
The watchdog later confirmed that Rachel Reeves had not been dealing with a large black hole in the public finances, contradicting earlier briefings from the Treasury. Ms Reeves went on to raise taxes and used part of the revenue to scrap the two child benefit cap.
Mrs Badenoch told MPs: “We now know that the head of the OBR was forced out for telling the truth that the Chancellor did not need to raise taxes on working people. We also know that the Chancellor was briefing the media, twisting the facts, all so she could break her promises and raise taxes.”
She said that if Ms Reeves were a CEO she would have been fired and might even have faced prosecution for market abuse. She confirmed that the Conservatives had written to the Financial Conduct Authority and asked Keir Starmer whether the Chancellor would cooperate with any investigation.
Sir Keir replied that Mrs Badenoch was “losing the plot”, paid tribute to Richard Hughes, and defended Labour’s record. He said growth was outperforming expectations, wages were rising, interest rates had been cut several times, and investment was strong. “We are turning the page on their austerity and their reckless borrowing,” he said.
Treasury Minister Defends Reeves and OBR
As the fallout continued after PMQs, Chief Secretary to the Treasury James Murray told MPs that Richard Hughes had chosen to resign and insisted that publication of the OBR letter had been agreed with the Chancellor. He said it was “completely untrue” to suggest otherwise.
He added that the OBR remained central to the fiscal framework and noted that its assessments were not without challenges, quoting comments from Professor David Miles.
Sir Mel Stride, the shadow chancellor, said the circumstances of Mr Hughes’s resignation were “unclear” and accused the Treasury of using the affair as a distraction from Ms Reeves’s conduct. He pointed to warnings from the OBR about partial leaks and misconceptions surrounding the Budget forecasts and asked whether Ms Reeves gave full confidence to Mr Hughes and whether she had put pressure on him to resign.
Mr Murray reiterated that the decision was Mr Hughes’s alone and that Ms Reeves had thanked him for his service.
Questions on Religion, Hate Crime and Freedom of Speech
Attention then moved to questions on religious freedom. Independent MP Shockat Adam highlighted violent attacks against Muslims and noted that Labour had dropped its previous adoption of a definition of Islamophobia. Sir Keir condemned hatred “in all its forms” and said the Government intended to act on anti Muslim hatred.
Labour MP Graham Stringer asked for assurances that the Government would not introduce a blasphemy law. Sir Keir replied that there would be no such measure and that it was important to protect the right to criticise religion.
EU Relations and Water Crisis
Sir Ed Davey challenged the Prime Minister over reports that his economic adviser had recommended a customs union with the European Union. Sir Keir said the Government sought closer relationships with the EU in some areas but would not re enter the single market or a customs union.
Sir Ed also raised the water crisis affecting residents in Royal Tunbridge Wells, where many households had been without water for five days. He urged Sir Keir to convene Cobra. The Prime Minister called the situation “shocking” and said the Government was bearing down on South East Water over the ongoing failures.
Badenoch Steps Up Attacks
Mrs Badenoch sharpened her criticism as the session continued, accusing Sir Keir of broken leadership and a broken Budget. She said unemployment was rising, families were worse off, and that millions had been “hung out to dry” by Labour’s decisions. She asked whether the Prime Minister was more concerned with protecting his own job than helping the public.
Sir Keir accused the Conservatives of pushing policies that had driven hundreds of thousands of children into poverty and said Labour’s abolition of the two child cap would lift half a million children out of hardship. He insisted he was bringing down bills and delivering a “brighter future”.
Mrs Badenoch later claimed that the hard Left had “had the last laugh” inside Labour after Budget rebellions, arguing that Sir Keir had lost control of his own MPs. He rejected this, saying child poverty was a moral mission and accusing the Conservatives of leaving children to suffer the consequences of their economic decisions.
She then said that Ms Reeves belonged “in la la land”, listing what she described as inaccurate claims about the Chancellor’s credentials and accusing Labour of raising taxes to appease its own MPs. Sir Keir defended the Budget and said the majority of families supported were in work.
More Clashes Over the OBR
Returning to the core dispute, Mrs Badenoch quoted anonymous criticism from within the Government describing the handling of the Budget as a “disaster from start to finish”. She asked why the Chancellor remained in her job if the OBR chairman had resigned over market sensitive leaks.
Sir Keir said Labour inherited a twenty two billion pound shortfall and a further sixteen billion pound cost from the Conservatives’ productivity record. He insisted the Budget protected the NHS, cut borrowing, stabilised energy bills, and maintained honesty with the public. He said the OBR had confirmed that the Chancellor’s speech was not misleading and called on Mrs Badenoch to apologise.
Starmer Defends Reeves’s Budget as Poverty Measures Announced
Earlier in the session, Sir Keir declared that he was “very proud” of the Budget, saying it protected the NHS, promoted stability, and helped households with energy bills. He said his Government was repairing what the Conservatives had left behind.
Labour MP Ian Lavery asked whether people in the north east had “much to look forward to” after years of economic decline. Sir Keir said it was Labour’s mission to reduce poverty and argued that scrapping the two child cap would benefit thousands of families in the region.
Sir Keir also announced new measures to support parents with the cost of infant formula, saying guidance and voucher access would help families save five hundred pounds before a child’s first birthday.
Budget Fallout Continues Beyond PMQs
Sir Mel Stride was granted an urgent question after PMQs about the OBR debacle. He noted that Mr Hughes had revealed Ms Reeves never faced a public finance black hole, contradicting earlier Treasury signals. Senior figures at the OBR also confirmed that the Treasury’s permanent secretary had approved the release of the letter showing the Chancellor understood the true state of the finances.
Ms Reeves and the permanent secretary are due to appear before the Treasury committee next week.
