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UK treasurer didn't mislead about economy, Starmer says

Dec 1, 2025

Britain's Prime Minister Keir Starmer delivers a speech in London — Prime Minister Keir Starmer said it was inevitable the government would have to raise taxes. -AP

UK finance minister Rachel Reeves did not mislead the public in the run-up to the budget, Prime Minister Keir Starmer says, adding that at one point he had also thought they would need to breach election pledges to hike taxes.

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Reeves used her budget on November 26 to increase taxes by Stg26 billion ($A52.5 billion) but managed to avoid breaching the Labour Party's manifesto pledge not to raise certain key taxes, such as income tax.

Reeves has since been accused of misleading the public in the run-up to the budget by overstating the weakness in the public finances, after the fiscal watchdog released a letter showing that the government had early knowledge that it had forecast stronger tax revenue.

The build-up to the event had been dominated by talk of the need for major tax hikes, but Reeves has defended herself, saying she wanted to build up a bigger fiscal buffer.

Setting out the process by which the government drew up the budget, including the downgrade to productivity forecasts, Starmer said it was inevitable that they would have to raise taxes.

"So there was no misleading there," Starmer said.

On the potential income tax hike, he said: "There was a point at which we did think we would have to breach the manifesto in order to achieve what we wanted to achieve."

"Later on, it became possible to do it without the manifesto breach."