Starmer to defend Reeves's Budget after black hole row

Sir Keir Starmer will issue a defiant defence of the Budget after Rachel Reeves was forced to deny having lied about the state of the country's finances in an effort to justify her £26bn worth of tax hikes.

- KATE DEVLIN WHITEHALL EDITOR

In what will be seen as an attempt to prop up his embattled chancellor, the prime minister will today argue that Ms Reeves has provided economic stability by raising billions of pounds more in so-called fiscal “headroom” to protect against future market shocks.

He will also defend her decision to spend billions more on benefits, rejecting the notion of trying to look “tough” on welfare for the sake of politics - although he will also pledge to reform the system and get more young people who are currently signed off sick into work.

But he is expected to face questions over Ms Reeves’s conduct, and crucially, whether she broke any rules, after she was accused of misleading the country and the markets ahead of the Budget by failing to disclose that she had a £4bn surplus rather than a £20bn deficit.

It comes as:

• The Conservatives have called for an investigation by the City watchdog, the Financial Conduct Authority (FCA)

• Nigel Farage’s Reform UK has called for a probe into whether the chancellor broke the ministerial code

• Ms Reeves is expected to face questions in the House of Commons over the row

• The chancellor insists the PM was kept fully informed of pre-Budget developments and knew there was no black hole

Pressed during an appearance on Sky News yesterday to say whether she had lied to the public by not giving a clear picture of the country's finances, a defiant Ms Reeves said: “Of course I didn’t.”