Britain's Starmer backs his Treasury chief after U-turns dent the government's fiscal plans

The Hill

a day ago

LONDON (AP) — British Prime Minister Keir Starmer's office said Wednesday that Treasury chief Rachel Reeves is secure in her job after a series of government U-turns dented her revenue-raising plans.
Speculation about Reeves' future mounted after she appeared to be in tears Wednesday in the House of Commons, the day after an embarrassing reversal for the government over its plans to cut welfare spending. Many viewers observed that Reeves looked exhausted and upset as she sat behind Starmer during the weekly Prime Minister's Questions session.
The Treasury said Reeves was dealing with a 'personal matter.' It would not elaborate.
Starmer initially declined to say, when asked by opposition leader Kemi Badenoch, that Reeves would still have her job when the next election is called, likely in 2029.
But Starmer's press secretary later said Reeves 'is going nowhere. She has the prime minister's full backing.'
On Tuesday, Starmer's government was forced to water down plans to curb welfare spending in order to quell a rebellion by lawmakers from his own party.
In something of a hollow victory, the bill passed its first big House of Commons hurdle after the government appeased Labour Party rebels by softening and delaying cuts to welfare benefits for disabled people. Even so, 49 Labour lawmakers voted against the bill.
The result is a major blow to Starmer's authority as he approaches the one-year anniversary of his election on Friday, reckoning with a sluggish economy and rock-bottom approval ratings.
It also leaves the Treasury short of money it had counted on to invest in public services, making tax increases more likely. The government has promised not to raise key levies including income tax and sales tax.
The government estimated that its welfare reforms would save 5 billion pounds ($7 billion) a year, but after the changes it's unclear whether they will save any money at all.
The reversal follows a decision in May to drop a plan to end winter home heating subsidies for millions of retirees, which Reeves had also counted on to raise money.