11 godzin temu
Rachel Reeves will be Chancellor for a "very long time to come", Sir Keir Starmer has said after she was seen crying during Prime Minister's Questions. The Prime Minister dismissed suggestions that her tearful appearance in the Commons was linked to the Government's welfare U-turn, which created an almost £5 billion black hole in her budget plans.
Speaking on the BBC's Political Thinking podcast with Nick Robinson, Starmer said the Chancellor's emotional state was due to a "personal matter" unrelated to politics. He refused to discuss the private issue further, stating it would be an intrusion on her privacy.
Personal matter behind tears
"It's got nothing to do with politics, nothing to do with what's happened this week. It was a personal matter for her," the Prime Minister explained. He emphasised that Reeves would continue in her role as part of their shared project to transform the Labour Party and change the country.
The Chancellor has done a "fantastic job", Starmer told the BBC, adding that they work and think together. He contrasted their relationship with past examples of chancellors and prime ministers who weren't "in lockstep", saying he and Reeves were aligned.
Markets react to emotional scenes
Markets took fright after scenes of Reeves's tears spread, with the value of the pound and long-term Government bonds slumping sharply. The dramatic market reaction highlighted investor concerns about the Government's economic stability following the welfare policy reversal.
In the Commons, Conservative leader Kemi Badenoch said Reeves looked "absolutely miserable" and challenged the Prime Minister to confirm whether she would keep her job until the next election. Starmer dodged the question about whether Reeves would remain for the remainder of Parliament, saying Badenoch "certainly won't".
Downing Street moves to reassure
Downing Street then insisted Reeves was "going nowhere" and would remain as Chancellor. Government allies confirmed she was dealing with a "personal matter" when asked about her tears, stressing she retained the Prime Minister's complete confidence.
As the Chancellor left the Commons after Prime Minister's Questions, her sister Ellie Reeves, who is also an MP, took her hand in an apparent show of support. Reports suggested Reeves had been involved in an altercation with Commons Speaker Sir Lindsay Hoyle shortly before the session.
Speaker altercation emerges
Sir Lindsay was said to have censured Reeves for her approach to Treasury Questions earlier in the week, with the Chancellor reportedly responding that she had been "under so much pressure". A spokeswoman for the Speaker declined to comment on the reported exchange.
Starmer, who stumbled on his way out of Downing Street for Prime Minister's Questions, faced questions over his handling of the welfare reform package. The changes were stripped of key elements to limit the scale of a potential Labour revolt.
Welfare U-turn creates budget hole
The Government abandoned changes to restrict eligibility for personal independence payment just 90 minutes before MPs voted on them on Tuesday. The U-turn wiped out savings that Reeves had counted on to help meet her goal of funding day-to-day spending through tax receipts rather than borrowing.
Asked why Starmer did not confirm in the Commons that he still had faith in Reeves, the Prime Minister's press secretary said he had done so repeatedly. The spokesperson emphasised that the Chancellor was "going nowhere" and had the Prime Minister's full backing.
Tax rise speculation intensifies
Labour has promised that income tax, employee national insurance contributions and VAT will not be increased, restricting Reeves's options for raising money if she looks to hike taxes. The Institute for Fiscal Studies's incoming director Helen Miller said tax rises would look "increasingly likely" given the spending constraints.
"Since departmental spending plans are now effectively locked in, and the Government has already had to row back on planned cuts to pensioner benefits and working-age benefits, tax rises would look increasingly likely," Miller said. She warned this would "doubtless intensify the speculation over the summer about which taxes may rise and by how much".
Prime Minister refuses tax pledge
Starmer declined to rule out tax rises later this year, telling MPs no prime minister or chancellor ever writes budgets at the despatch box. The Prime Minister's press secretary also confirmed that Work and Pensions Secretary Liz Kendall retained his confidence when asked directly about her position.
The emotional scenes at Westminster have raised fresh questions about the Government's economic direction as it grapples with the financial consequences of its policy reversals. The Chancellor's tears and the subsequent market reaction have highlighted the pressure facing the Treasury as it seeks to balance spending commitments with fiscal responsibility.
(PA/London) Note: This article has been edited with the help of Artificial Intelligence.
