Kemi Badenoch accused Chancellor Rachel Reeves of potential market abuse during her first face-to-face confrontation with Prime Minister Sir Keir Starmer since the Budget. The Tory leader claimed Reeves could face prosecution over her messaging before announcing £26 billion in tax rises, escalating the political clash at Wednesday's Prime Minister's Questions.
Badenoch told Parliament her party had written to the Financial Conduct Authority demanding an investigation. She stated: «We now know that the head of the OBR was forced out for telling the truth that the Chancellor did not need to raise taxes on working people. We also know that the Chancellor was briefing the media, twisting the facts, all so she could break her promises and raise taxes. If she was a CEO, she would have been fired, and she might even have been prosecuted for market abuse. That's why we've written to the Financial Conduct Authority. So will the Prime Minister ensure the Chancellor fully co-operates with any investigation?»
Starmer dismissed the accusations, responding: «She's completely losing the plot.» The Prime Minister defended the Office for Budget Responsibility, stating: «May I pay tribute to Richard Hughes and his leadership of the OBR. He made very clear why he stepped down, and I made very clear my support of the OBR.» He added that the OBR had found the Chancellor's speech «not misleading» and demanded Badenoch apologize.
OBR resignation fuels controversy
Former OBR chairman Richard Hughes resigned Monday after the watchdog's assessment of the Chancellor's plans was inadvertently published online last Wednesday, before Reeves delivered her Budget speech. The OBR had indicated Reeves's messaging in the weeks before the Budget was «not inconsistent» with analysis it had shared with her.
The controversy centers on whether the Chancellor overstated the fiscal challenge to justify tax rises. Starmer countered: «What she (Badenoch) doesn't understand is picking up a £16 billion tab for their failure is not a good starting point for any Budget and the OBR said yesterday that the Chancellor's speech was not misleading, so if the Leader of the Opposition had any decency, she'd get up now and apologise.»
FCA sidesteps investigation commitment
FCA chief executive Nikhil Rathi appeared to avoid directly committing to an investigation when pressed at the Financial Times' Global Banking Summit on Wednesday morning. He said: «We have had some letters in from MPs, we have a specific remit and we will be replying shortly to that.»
Shadow Chancellor Mel Stride had formally called for the FCA to investigate potential market manipulation, stating in a letter: «Confidential market sensitive information appears to have been spun, leaked and misused – and markets, businesses and families have paid the price.»
The clash extended to the government's decision to scrap the two-child benefit cap. Badenoch criticized: «He now boasts about removing the two-child benefit cap, but he used to say that it was unaffordable. He even removed the whip from seven of them for wanting the same thing. He is very happy to throw them under a bus when it pleases him. So, I ask the Prime Minister, how did it suddenly become affordable at the very time he needed to save his own skin?»
Starmer defended the policy change, stating he was «very proud that we're lifting half a million children out of poverty.» He called the Conservatives the «party of child poverty,» adding: «Their policy of nearly 10 years on the two-child benefit cap had one result and one result only – it dragged hundreds of thousands of children into poverty. They should be utterly ashamed of that.»
Note: This article was created with Artificial Intelligence (AI).
