Badenoch: Reeves could be prosecuted for market abuse over claims before Budget

The Chancellor could be prosecuted for market abuse, Kemi Badenoch has claimed as she came face-to-face with the Prime Minister for the first time since the Budget was announced.

Rachel Reeves has faced accusations she misled voters by overstating the scale of the fiscal challenge in the run-up to last week’s Budget, in which she announced £26 billion of tax rises.

She has also reportedly been accused of misleading the Cabinet.

Sir Keir Starmer hit back at the Conservative leader during Prime Minister’s Questions on Wednesday, telling the Commons she is “completely losing the plot”.

He also referred to the Office for Budget Responsibility’s (OBR) suggestion that Ms Reeves’s messaging in the weeks before the statement was “not inconsistent” with analysis it shared with her.

The Prime Minister has previously said there was “no misleading” by the Chancellor.

Speaking on Wednesday, Mrs Badenoch said: “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?”

Sir Keir replied: “She’s completely losing the plot.

“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.”

Former OBR chairman Mr Hughes resigned on Monday after its assessment of the Chancellor’s plans was inadvertently made available online before Ms Reeves delivered her speech last Wednesday.

Mrs Badenoch went on to say: “The Prime Minister talks about losing the plot. Let me read to him what his own Cabinet members are saying, and I quote, ‘the handling of this Budget has been a disaster from start to finish’.”

She pointed to Deputy Prime Minister David Lammy as she asked: “Who said that? Was it him?”

Mrs Badenoch pointed at other Cabinet members as she asked: “Was it her? In fact, I think it was probably her, actually, it was probably the Chancellor.”

In his response, Sir Keir said: “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.”

The Tory leader went on to say Ms Reeves “doesn’t belong in the Treasury, she belongs in la la land”, as she criticised the Government’s decision to scrap the two-child benefit cap.

She added: “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?”

Sir Keir said he was “very proud that we’re lifting half a million children out of poverty”, and claimed the Tories are the “party of child poverty”.

He added: “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.”