Kemi Badenoch said that Sir Keir Starmer’s Government “may write a cheque to compensate Gerry Adams”.

“This is shameful,” the Conservative Party leader said.

Sir Keir Starmer said the UK Government will look at “every conceivable way to prevent” former Troubles internees, such as Mr Adams, seeking payments.

The Prime Minister criticised the Northern Ireland Troubles (Legacy and Reconciliation) Act 2023 and said he will continue with efforts to replace the existing legislation, which stopped such payouts to Mr Adams and other former internees.

Kemi Badenoch turned to the resignation of Tulip Siddiq as Treasury minister amid a corruption row.

She said: “At a time of turmoil in the markets the Prime Minister was distracted by the crisis around the former city minister.

“What does it tell us about his judgement that yesterday he said he was ‘saddened’ that his close friend resigned? This was an anti-corruption minister under criminal investigation for corruption.

“Muhammad Yunus, the Nobel Prize winner advising Bangladesh, said London properties gifted to the former city minister may be proceeds of robbery.

“So will the Prime Minister offer Bangladesh the full support of our National Crime Agency in ensuring that any properties bought with stolen funds are properly investigated?”

Sir Keir Starmer said: “The former city minister referred herself to the independent adviser. He found, as she well knows, there was no breach of the code. She knows that he found that there was no wrongdoing and that the former minister fully cooperated.”

Kemi Badenoch said: “The Prime Minister claims he has full confidence in the Chancellor, but the markets clearly do not. Yesterday the Chancellor repeated her promise to have just one budget per year to provide businesses with certainty.

“The talk in the City is that she can’t meet her fiscal rules, and there will need to be an emergency budget. So does the Prime Minister stand by the Chancellor’s commitment that there will be only one budget this year?”

Sir Keir Starmer replied: “The Prime Minister claims he has full confidence in the Chancellor, but the markets clearly do not. Yesterday the Chancellor repeated her promise to have just one budget per year to provide businesses with certainty.

“The talk in the City is that she can’t meet her fiscal rules, and there will need to be an emergency budget. So does the Prime Minister stand by the Chancellor’s commitment that there will be only one budget this year?”

Kemi Badenoch hit out at the proposed deal with Mauritius to hand over the Chagos Islands.

The Conservative leader said: “The Prime Minister knows very well the OBR found no such black hole, and he talks about a budget three years ago, the borrowing costs last week are at a 27-year high for 30-year gilts. The Chancellor is apparently promising to be ruthless in reducing spending, let me suggest something he should cut.

“There is no way that we should be giving up British territory in Chagos. He is rushing a deal which will be disastrous and will land taxpayers with a multibillion-pound bill. Why does the Prime Minister think British people should pay to surrender something that is already ours?”

Sir Keir Starmer said: “We inherited a situation where the long-term operation of a vital military base was under threat because of legal challenge.

“The negotiations were started under the last government. The then foreign secretary came to this house to say why he was starting negotiations and what he wanted to achieve. And he said the aim was, to quote, ensure the continued effective operation of the base. That is precisely what this deal has delivered.”

Mrs Badenoch went on to brand the agreement a “dud”.

Kemi Badenoch pressed Sir Keir Starmer to rule out more tax hikes this year.

The Leader of the Opposition said: “Just today, the British Retail Consortium says two-thirds of businesses will have to raise prices to cope with his tax hike, his Chancellor ignored all the warnings and ploughed ahead with an unprecedented borrowing spree, leaving all of us more vulnerable.

“Now, we have businesses saying they will raise prices to cover his jobs tax, we have an energy policy that will drive up bills, and all the while, we are spending more day-to-day on debt interest than we do on schools and universities.

“The Prime Minister refused to repeat his Chancellor’s promise that she would not come back for more, will he now rule out any new tax rises this year?”

The PM replied: “We took the right and difficult decisions at the budget, decisions that they did not have the courage to take, which left us in the mess in the first place.

“When it comes to tax, she knows very well the limits of what I can say from this despatch box, but we have an ironclad commitment to our fiscal rules. We can’t just tax our way up to the problems that they left us, which is why we put in place tough – they were howling at the spending decisions, they wouldn’t take them, and we’ll stick to those spending decisions and our focus is absolutely on growth.”

In her first question at PMQs, Kemi Badenoch said: “While borrowing costs hit levels not seen since Labour was last in government, I met business owners and their employees in Chesterfield. One of them told me that his business will not exist in four years’ time because of this Government’s policies, it might not even exist next year.

“The Prime Minister may try to blame his inheritance, or blame global factors. But why should anyone trust a word he says over the businesses who are saying again and again that his budget means fewer jobs, lower growth and higher borrowing costs?”

Sir Keir insisted the global economy is experiencing “volatility” which is why he “took the tough and right decisions in the budget to get our finances back in order”.

He added: “We had to deal with the £22 billion black hole that they left, made difficult cuts, raised taxes to invest in health, public services and housing, vital to disability, vital to growth, and we’ve got an ironclad commitment to our fiscal rules, and she will welcome, no doubt, the inflation figures from this morning.

“But contrast that with the party opposite, they weren’t brave enough in government to take those difficult decisions. They’ve opposed all of our measures to stabilise the economy and promote growth.

“They’re back to the magic money tree, she wants all the benefits of the budget, but she can’t say how she’s going to pay for them. They haven’t changed, they’re still economic vandals and fantasists, imagine where we’d be if they were still in charge.”

Sir Keir Starmer opened Prime Minister’s Questions by congratulating Donald Trump ahead of his inauguration next Monday.

He thanked Joe Biden for his “steadfast leadership” as he prepares to leave the White House.

Sir Keir Starmer has been pictured leaving 10 Downing Street ahead of PMQs in the Commons.

Kemi Badenoch has plenty of topics to grill Sir Keir Starmer about at today’s PMQs session which starts at midday.

They include the resignation of Treasury minister Tulip Siddiq yesterday over a corruption row.

There are also question marks about under-fire Rachel Reeves’s long-term future as Chancellor.

The Tory leader could go on the attack over the economy after a surge in government borrowing costs.

And Sir Keir is facing a major backlash over the Chagos Islands deal amid reports the sign-off is imminent.