Starmer 'hit with backlash from Cabinet ministers' over plans to slash public spending in Budget

17 October 2024, 00:37

Keir Starmer and Rachel Reeves are facing a backlash from some ministers over plans to slash government spending at the Budget later this month.

Several Cabinet members, including deputy Prime Minister Angela Rayner, are said to have raised objections over the plans, which may involve cuts of up to 20%.

The Budget is set to involve "difficult decisions" for Chancellor Ms Reeves, as she seeks to close a £40 billion funding gap.

This will involve both tax rises - heavily rumoured to include both increases to employer national insurance, and to capital gains tax on sales of shares - and cuts to public spending.

Major spending decisions for the Budget, which Ms Reeves will announce on October 30, had to be finalised by the end of Wednesday. They will then be sent to the Office for Budget Responsibility.

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As well as Ms Rayner, others who are said to have objected at a Cabinet meeting this week and via letters to Starmer include Justice Secretary Shabana Mahmood and Transport Secretary Louise Haigh.

Jonathan Ashworth, a former member of the Shadow Cabinet and Treasury special adviser, played these calls down as "par for the course".

He told LBC's Andrew Marr that he had been "intimately involved in these discussions with departments, and this is part of the negotiation".

He added that he remembered departments" leaking all kinds of things to the media".

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"This is what just goes on," he said. "Departments try to pressure the Treasury so they can get the best settlement. It's par for the course."

Experts have argued that ministers need to find £20 billion 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.

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 Sir Keir 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 £22 billion black hole that the previous government lied about and covered up.

"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."