Ministers revolt over misled budget Starmer and Reeves underfire

Ministers revolt over misled budget, Starmer and Reeves under fire

Westminster has been thrown into open warfare as Labour Cabinet ministers accuse Sir Keir Starmer and Chancellor Rachel Reeves of misleading their own top team over the state of Britain’s finances — a scandal insiders say has left both leaders “mortally wounded.”

According to explosive revelations first reported by The Times, Reeves repeatedly told Cabinet that a severe downgrade in productivity forecasts had created a gaping black hole in the public finances, forcing Labour to break its manifesto pledge and hike income tax by 2p. Ministers were led to believe the cupboard was bare — that there was simply no alternative.

But it has now emerged that the Office for Budget Responsibility had privately informed Reeves before the Budget, on October 31, that the productivity hit had been more than cancelled out by unexpectedly strong tax receipts. The result? A £4.2 billion surplus — news known only to Reeves and Starmer, and concealed from the rest of the Cabinet.

One furious minister told the paper: “Why did Keir and Rachel allow the country to believe for so long that we would break our manifesto when they knew it wasn’t true?” Another branded the Treasury operation “not exactly cutting-edge,” while a third said the pair now looked “weak and incompetent.”

Reeves has flatly denied lying, claiming the OBR surplus did not account for her decision to build up £22 billion of headroom to shield against future shocks — and defending the Budget on the grounds of spiralling costs from welfare reversals and the winter fuel U-turn. She insists the financial choices were responsible, not deceptive, and stressed that Starmer was “fully aware” of the forecasts, describing their working relationship as “a partnership.”

But critics inside Labour see an operation in chaos. What was billed as a steady, disciplined first budget has instead triggered Cabinet fury, public confusion and a swelling revolt on the Labour benches. The perception that Starmer and Reeves knowingly allowed a false impression of crisis to justify tax rises is politically toxic — and opponents are capitalising.

Nigel Farage has demanded a ministerial code investigation, arguing the public and markets were misled. Shadow chancellor Alex Burghart has written to Starmer accusing Reeves of a “serious breach of trust” and demanding she face urgent questioning in Parliament.

Sensing the danger, Starmer is expected to pivot hard onto welfare reform in a major London speech on Monday — an attempt to regain the narrative by painting the Budget as the beginning of a tougher, more disciplined state. Whether that resets the political weather or simply deepens the sense of drift remains to be seen.

For now, the government looks battered, divided and off-balance — and the Budget that was meant to define Labour’s competence has instead opened the biggest rift of Starmer’s premiership.

KEY TAKEAWAYS:

• Labour ministers accuse Starmer and Reeves of misleading Cabinet about a supposed financial crisis.

• Reeves allegedly withheld OBR confirmation of a £4.2bn surplus, contradicting her tax-rise rationale.

• Furious internal revolt and opposition attacks leave Labour’s top team politically damaged.

SOURCE: EXPRESS