Conservative leader Kemi Badenoch has challenged Sir Keir Starmer over the government’s handling of the economy, saying the UK was now “spending more on debt than on schools and hospitals”.
Speaking at Prime Minister’s Questions, Badenoch told MPs: “His budget means fewer jobs, lower growth and higher borrowing costs”, and she asked whether Chancellor Rachel Reeves was planning to raise taxes in a March mini-budget.
Defending his chancellor, the prime minister said the government’s fiscal rules were “iron clad”, and the government “can’t just tax and spend our way out of [the] problems”.
And he said Reeves would be chancellor for “many, many years to come”.
Recent market turbulence has meant the cost of servicing UK debt has risen, and the last few days have seen pressures on the public finances increase, after government borrowing costs hit their highest level for several years.
Attacking the Conservatives as “economic vandals and fantasists”, Sir Keir said his focus was on growth.
“They flatlined the economy and left us with the worst cost of living crisis in living history and a £22bn black hole, so I won’t be taking lesson on the economy from them,” he said.
Badenoch said the Office for Budget Responsibility “found no such black hole” and said two-thirds of businesses have complained they will need to raise prices as a result of Labour’s first budget, which raised national insurance costs for employers.
“The prime minister claims he has full confidence in [Rachel Reeves] but the markets clearly do not,” she said, adding: “Labour congratulated themselves in having the first female chancellor, instead of ensuring they had somebody who was qualified for the job.”
The Conservative leader also highlighted that the PM has lost two ministers in as many months, with the resignation of city minister Tulip Siddiq, and the resignation of transport minister Louise Haigh at the end of November due to an historic fraud conviction.
Sir Keir dismissed Badenoch’s insults as “cheap political points” and compared the resignations to the actions of the current Conservative shadow foreign secretary, Priti Patel, who remained in post as home secretary despite being found to have breached the ministerial code.
And he delivered his own barb at the Tories’ former leader Liz Truss, who sent the PM a letter demanding Labour stop claiming she “crashed the economy” as it was damaging her reputation.
Sir Keir said: “It wasn’t written in green ink but it might as well have been.
“It was actually crashing the economy that damaged her reputation.”
