Rachel Reeves accused of ‘misleading’ UK over public finances – live updates

Sir Keir Starmer admitted that there is “no effective deterrent in the Channel” as France allowed police to start intercepting small boats.

In a letter to French president Emmanuel Macron seen by Le Monde, the prime minister said France must do more to tackle the “shared burden” of irregular migration.

Starmer urged France begin tackling boats at sea in order to prevent people from reaching the UK.

“It is essential that we deploy these tactics this month … We have no effective deterrent in the Channel,” the letter read.

He said “if we cannot … resolve this crisis together, those who follow us will try to do it in our place”, warning Labour successors may set nations against each other and lead the continent down “a very troubling path”.

Kemi Badenoch said a Conservative government would reverse measures in the Employment Rights Bill that were “bad for business”.

Asked whether she would increase that period if she came to power, Mrs Badenoch told broadcasters: “What I have said is that the things that are in the Bill that are bad for growth, bad for jobs, bad for business, we will scrap them.”

Adding that “quite a lot of the things in (the Bill) are really about unions, giving unions more power”, she said: “This is not what the country needs right now.

“The reason why the UK is not growing is not because employees don’t have enough rights. We don’t have enough jobs.”

Downing Street defended the chancellor as she faced accusations she misled the public over the state of Britain’s finances in the lead-up to the budget.

The OBR revealed on Friday that Reeves had been told the spending gap had been closed altogether by October, before she laid out the case for raising taxes.

More than half of UK businesses are planning to slow recruitment due to the fallout of this week’s budget, a new poll has found.

Some 56 per cent of business leaders said they were likely to hire fewer people than they had planned for ahead of Wednesday’s announcement.

Businesses were mostly spared from the targeted tax hikes, but measures like freezing income tax thresholds and hiking the minimum wage are expected to indirectly impact firms.

500 business leaders were polled on sentiment by WPI Strategy and Merlin Strategy.

Rachel Reeves was told by the OBR in September that prevailing economic winds meant the presumed £20bn gap in public finances would be much smaller than expected in the run up to the Budget.

Reeves now faces accusations she misled the public by stressing the need for tax rises as late as November. Here’s how it unfolded:

17 September: The OBR told the chancellor in its first forecast that the fiscal watchdog had only made small amends to its overall assessment of where public finances stood.

The black hole was estimated at £2.5 billion at this point.

31 October: The OBR told Reeves that she was now sitting on a surplus of some £4.2 billion, as inflation saw tax revenues increase.

4 November: Reeves delivers a crisis press conference warning that public finances are in dire straits, seen widely as a way to prepare the country for tax hikes – potentially a breach of manifesto promises.

13 November: The prospect of a hike in income tax rates – which was trailed for several weeks – were dropped on November 13, with the Treasury citing improved forecasting.

26 November: The chancellor delivers the Budget and raises taxes by £26 billion.

Paul Johnson, a former head of the Institute for Fiscal Studies (IFS) think tank, said “it probably was misleading”.

“It was designed to confirm a narrative that there was a fiscal black hole that needed to be filled with significant tax rises,” he told The Times. “In fact, as she knew at the time, no such hole existed.”

Downing Street was asked on Friday whether Ms Reeves’ warnings of coming difficult decisions despite the OBR’s improved forecasting meant she had misled the public and the markets in the run-up to the Budget.

“I don’t accept that,” the Prime Minister’s official spokesman said.

He added: “As she set out in the speech that she gave here (Downing Street), she talked about the challenges the country was facing and she set out her decisions incredibly clearly at the Budget.”

Kemi Badenoch called for the chancellor to lose her job amid accusations she misled Britain over the state of public finances.

“Yet more evidence, as if we needed it, that the Chancellor must be sacked,” the opposition leader said on Friday.

“For months Reeves has lied to the public to justify record tax hikes to pay for more welfare.”

“Her Budget wasn’t about stability. It was about politics: bribing Labour MPs to save her own skin. Shameful.”

The Chancellor was accused of misleading Britain over her assessment of the state of public finances ahead of the budget.

The Office for Budget Responsibility (OBR) said on Friday that a downgrade in productivity forecasts that Rachel Reeves had used to illustrate the “challenges” facing the nation had been more than offset by a rise in tax revenues due to inflation.

Richard Hughes, chairman of the OBR, wrote to the Treasury select committee and revealed that Reeves had been told in September that the OBR had only made small downgrades to its overall assessment.

Reeves had warned it would have “consequences” for people’s jobs and wages, and said she would have to raise taxes as a result.

Labour faces scrutiny over the decision to raise taxes in the budget, which the Institute for Fiscal Studies (IFS) think tank said amounts to a breach of manifesto promises. The prime minister has refuted the charge.

French police will intercept small boats at sea in an attempt to stop migrants crossing the Channel.

A document seen by French newspaper Le Monde, signed by four prefectures in the north of France, agrees that maritime police will start “planned operations” to intercept the dinghies. The push-backs will start initially at sea, and then be conducted in the “inland waters” of ports and channels, the paper reported.

Holly Bancroft has the full story: