KEIR Starmer is facing a rebellion from his own Cabinet over the extent of the austerity measures planned for the Labour Government’s first Budget.
Even Deputy Prime Minister Angela Rayner is reported to be among the key Government figures to have expressed deep concerns about Chancellor Rachel Reeves’s planned cuts.
It comes after Blooomberg reported that three Cabinet ministers had gone over the Chancellor’s head and written about their concerns in formal letters sent directly to the Prime Minister.
The Times later reported that the ministers in question were Rayner, Justice Secretary Shabana Mahmood, and Transport Secretary Louise Haigh.
One Cabinet minister told that paper that the proposed cuts were “absolutely huge,” as some reports suggested departments could face having up to 20% of their budget slashed.
Reeves told ministers during Tuesday’s Cabinet meeting that plans to fill what Labour calls a “£22 billion black hole” in the UK’s finances will be enough only to “keep public services standing still”.
The Treasury is said to have identified a far larger £40bn funding gap which Reeves will seek to plug to protect key departments from real-terms cuts and put the economy on a firmer footing.
It is with the Treasury rather than the Prime Minister that ministers are said to be largely directing their pushback efforts, as Reeves seeks to finalise her first Budget which she will deliver on October 30.
Experts have argued that ministers need to find £20bn to avoid a squeeze on so-called “unprotected” departments pencilled in by their Tory predecessors, and billions more to prevent a sharp fall in investment spending.
READ MORE: Labour Government slammed over silence on SNP call to scrap Internal Market Act
Some of that could come from changing the measure the Government uses to calculate debt, but economists from the Institute for Fiscal Studies have suggested that some tax rises are all but inevitable to prevent cuts to day-to-day spending.
Downing Street has denied that Starmer gave the public the wrong impression about the scale of tax rises that would come under Labour.
Asked whether the Prime Minister had misled voters, his press secretary said: “No. So we stand by our commitments in the manifesto, which was fully funded.
“We were honest with the British public, both during the election and since, about the scale of the challenge that we would receive.
“Then, of course, one of the first things the Chancellor did when we came in was do an audit of the books and found a £22bn black hole that the previous government lied about and covered up.
READ MORE: Top economist tears into Labour austerity in brilliant Question Time moment
“So that’s why we have continued to be honest with the British people that there are going to be difficult decisions in this Budget, and that’s because of the mess that the Conservatives left the economy in.”
The news of imminent and severe cuts undermines Labour’s repeated claims that they will not bring in austerity.
Earlier this week, Energy Minister Michael Shanks said that the SNP needed “to look up a dictionary for what austerity means” if they thought Labour were bringing it in.
And Scottish Labour MSP Anas Sarwar has been repeatedly reminded of his pre-General Election comments, made directly to John Swinney: "Read my lips. No austerity under Labour."
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel