Reeves has Starmer’s full backing, says No 10 after chancellor’s tears in Commons

[ad_1] Rachel Reeves was in tears at prime minister’s questions on Wednesday because the Tory chief, Kemi Badenoch, attacked the federal government over its U-turn on welfare cuts.

The chancellor wiped away a tear after a sequence of questions from Badenoch, who mentioned Labour MPs had mentioned she was “toast”, and recommended the prime minister had failed to substantiate that Reeves would keep in publish till the election.

Downing Road weighed in instantly behind Reeves, with aides saying she was “going nowhere” and that there could be no reshuffle.

A spokesperson for Reeves mentioned: “It’s a private matter, which – as you'll count on – we're not going to get into. The chancellor can be understanding of Downing Road this afternoon.”

Reeves had gave the impression to be upset earlier than prime minister’s questions had began. Through the 30-minute session, Badenoch mentioned the chancellor regarded “completely depressing”, earlier than urgent Starmer on whether or not she could be in publish on the subsequent election.

After Starmer didn't straight reply, the Tory chief replied: “How terrible for the chancellor that he didn't affirm she could be in publish.”

Because the prime minister continued to talk, Reeves wiped away a tear. Angela Rayner, the deputy chief, appeared to mouth some phrases of consolation to her colleague.

The dramatic second within the Home of Commons comes after Starmer withdrew the welfare cuts following a revolt by Labour MPs.

It leaves Reeves with some extraordinarily arduous decisions to return within the autumn funds on tax rises and spending priorities – together with on the two-child profit cap – after the federal government’s welfare U-turn.

Earlier on Wednesday, sources near the chancellor mentioned she must underline to MPs that there was now £5bn much less to spend on different priorities, which might have penalties for different measures – together with the £3.5bn value of scrapping the unpopular cap on baby profit funds.

The Treasury and No 10 haven't definitively dominated out a change to the two-child rule however mentioned the chaotic U-turn on welfare cuts on Tuesday evening would have a serious influence.

The second studying of the federal government’s flagship welfare invoice handed its first Commons take a look at solely after a central ingredient was eliminated – adjustments to non-public independence funds. The invoice handed with a revolt of 49 Labour MPs, greater than thrice greater than the earlier greatest revolt.

Pat McFadden, the Cupboard Workplace minister, mentioned explicitly on Wednesday morning that there have been now robust decisions to be made. “In any budgetary resolution, there’s positively a value to what was introduced yesterday, and you'll’t spend the identical cash twice, so more cash spent on which means much less for another function,” he informed the BBC.

Whereas economists together with the Institute for Fiscal Research have centered on the necessity for the chancellor to boost taxes on the funds, Treasury sources mentioned there would even be implications for spending priorities – together with ones common with Labour MPs.

“We’re not going to bluff this, we’re not going to cover it. We’re going to be clear there's a monetary value to this,” mentioned one ally. “Labour MPs want to grasp that. After all, tax is among the levers we may have to tug. We’re not going to duck that.

“These Labour MPs and charities and others who need the two-child restrict lifted, how are you going to pay for it now? Labour MPs made a selection final evening, and the federal government accepted that selection, however we're going to be trustworthy that that selection comes at value, as a result of it does.”

They mentioned they'd not countenance additional adjustments to the fiscal guidelines. “Which means extra debt curiosity, taxpayers’ cash going to hedge funds. Is {that a} progressive factor?”

No definitive plans are but in movement for the right way to fill the outlet left by the welfare U-turn. A Treasury supply mentioned it might rely on future financial progress, in addition to oil costs and receipts the Treasury receives from its clampdown on tax evasion.