Starmer denies breaking Labour manifesto pledge

As economists sound dire warnings over Budget tax plans

- KATE DEVLIN MILLIE COOKE

Rachel Reeves’s Budget will fail to boost Britain’s growth, leading economists have warned, as Sir Keir Starmer was forced to deny Labour had misled the public over its record £26bn tax rises.

In a damning assessment of the chancellor's plans, the highly respected Institute for Fiscal Studies (IFS) said Ms Reeves had ducked measures that could have turned the dial on growth – previously the chancellor's “number one priority”.

The Budget watchdog, the Office for Budget Responsibility (OBR), also said none of the dozens of measures unveiled on Wednesday would have a “material” effect on growth.

The withering verdict came as the prime minister sought to refute claims that Labour had broken its manifesto pledge not to raise taxes for working people - which the IFS roundly said it had.

As a row erupted over the manifesto pledge, Sir Keir insisted the tax-raising Budget had been necessary to help the NHS and schools, and to ease child poverty – but dodged questions on whether his government would have to raise taxes again.

In a day of drama inside Westminster as experts digested the dozens of measures in the Budget, it also emerged that:

• The extended freeze on tax thresholds will hit lower earners harder than a 1p rise in the basic rate of income tax, according to a think tank

Ms Reeves's pledge to take £150 off the cost of energy bills will fall to just £39 after three years, the IFS said

The new "mansion tax" will cause the price of homes worth more than £2m to fall, experts predicted