‘Personal matter’ and clash with Speaker open floodgates for UK Chancellor Rachel Reeves

Throughout prime minister’s questions Rachel Reeves, the UK chancellor, looked emotional as she sat at Keir Starmer’s side. Kemi Badenoch, the Tory leader, smelt weakness.

Politics can be a brutal business. Throughout prime minister’s questions Rachel Reeves, the chancellor, looked emotional as she sat at Sir Keir Starmer’s side. Kemi Badenoch, the Tory leader, smelt weakness.

“The chancellor is pointing at me but she looks absolutely miserable,” Badenoch said. “The fact is that Labour MPs are going on the record saying that the chancellor is toast. The reality is that she is a human shield for the prime minister’s incompetence. In January, he said that she would be in post until the next election. Will she really?”

Starmer failed to answer the question and within a few minutes Reeves was crying. She continued to do so on and off for the rest of the session before leaving the chamber hand-in-hand with her sister Ellie Reeves, the Labour MP for Lewisham West & East Dulwich.

Reeves’s tears caught colleagues in Downing Street by surprise, baffling ministers and officials alike. More than half an hour later the Treasury issued a statement saying that her tears were a “personal matter which, as you would expect, we are not going to get into”.

No 10 was so wrong-footed that Starmer’s X account posted a video of him in the Commons boasting about “promises made, promises delivered” in which Reeves could be seen in the background wiping away tears. It was swiftly deleted. The House of Commons cropped the chancellor out of all official photographs despite her sitting right beside the PM.

Perhaps unsurprisingly, the conversation in Westminster and the City immediately turned to the subject of Reeves’s future.

The government’s extraordinary U-turn over welfare, and the prospect of huge tax rises in the autumn budget, had significantly increased pressure on the chancellor, with backbenchers openly briefing against her. Starmer’s failure to back Reeves in the Commons only added to the speculation.

One cabinet minister claimed that Reeves had clashed with Starmer before prime minister’s questions – claims which were emphatically denied by both No 10 and No 11. Reeves and Starmer had in fact not seen one another that morning before PMQs.

The chancellor was, however, involved in an altercation with Sir Lindsay Hoyle, the Speaker of the Commons.

Hoyle approached Reeves on the floor of the Commons shortly before midday about her conduct at Treasury questions on Monday, where he had asked her three times to be more succinct in her answers. On the third occasion, he interrupted her and she replied: “Oh, all right then.” The comments were picked up by a sketch writer.

Yesterday (Wednesday) Hoyle told Reeves that her conduct “doesn’t help me, it doesn’t help you”. Reeves denied answering back and started crying in the chamber. Colleagues said that her reaction was in part because she was already in a “difficult place” over the undisclosed personal issue.

No 10 and No 11 attempted to mount a rearguard action. Downing Street said that Reeves was “going nowhere”. The chancellor is expected to make a series of official visits on Thursday and Friday (local time) in which she will insist she is “getting on with the job”. The trouble is the markets – and some colleagues – are not convinced. The cost of government borrowing rose sharply from the moment that Reeves began crying in the chamber, amid speculation that she could be replaced by Pat McFadden, the chancellor of the Duchy of Lancaster. Yvette Cooper, the home secretary, and Ed Miliband, the energy security and net zero secretary – both of whom have previously worked in the Treasury – were also said to be in the mix.

While Reeves was facing questions over her own future, the blame game over Tuesday’s climbdown on welfare was being played out in government.

After months of insisting that welfare reforms were a moral, economic and political necessity, the government caved. The disability reforms were dropped in their entirety, leaving a pounds 4.5 billion gap in the public finances. Combined with the impact of the U-turn on winter fuel payments, that hole grew to pounds 6.5 billion.

McFadden all but admitted that tax rises were on the way when he told Times Radio that there would be “financial consequences”.

The Institute for Fiscal Studies said that the total scale of tax rises required could be as much as pounds 40 billion – similar to last year’s budget – because of the impact of lower rates of economic growth than previously forecast and higher levels of spending.

A plethora of tax rises are in consideration, including extending the freeze on income tax thresholds, increasing capital gains tax and a tax raid on savers. Economists question whether Reeves’s central pledge not to raise income tax, national insurance or VAT will survive.

Meanwhile there is no shortage of culpability from Starmer himself, his most senior aides, government whips, Reeves and Liz Kendall, the work and pensions secretary.

In the eyes of Labour MPs, top of the list of “villains” was Downing Street and a longstanding failure by Starmer’s team to engage with his parliamentary party and a belief that their support could be taken for granted.

One senior MP said that No 10 aides had fundamentally misread the mood among Labour MPs throughout the process, while Starmer himself has admitted that he was too busy on international affairs to engage.

Morgan McSweeney, the prime minister’s chief of staff, has already been the target of a series of bitter briefings. Liz Lloyd, Starmer’s director of policy, delivery and innovation who was brought in to help shore up No 10, has been accused of failing to ensure that the welfare package was road- tested with MPs before it was presented as a fait accompli with the publication of the bill last week.

Rachel Reeves appears tearful during the Prime Minister's Questions (PMQ) session. Picture; AFP.

Lloyd, along with other political aides in Downing Street, has been blamed for the decision to “sell” the policy as a money-saving exercise that failed to chime with Labour “values”.

Claire Reynolds, another former Tony Blair and Gordon Brown aide, and the wife of the business secretary Jonathan Reynolds, was also in the line of fire. As No 10’s political director she was supposed to be the link between Starmer and the parliamentary party and is said to have misjudged the strength of feeling among MPs about the plans.

Another source said there were “too many cooks” in No 10 policy while delivery remained underpowered. Others blamed Sir Alan Campbell – the chief whip and the prime minister’s eyes and ears in the Commons – for the original strategy of using strong-arm tactics and threats to try to force loyalty.

Reeves, for her part, was accused of holding out on a climbdown until the last minute amid deep concern in the Treasury over the fiscal impact. The Treasury said the claim was untrue.

The resentment will linger. Starmer is said to be considering a “revenge reshuffle” of mid-ranking ministers amid concerns that some of them helped the rebels bring down the welfare reform. The suggestion was rejected by No 10.

Ultimately it is Starmer and Reeves who will carry the can. Downing Street said that the prime minister would “plough on” but colleagues are increasingly questioning whether he will even make it to the next election.

Ministers increasingly talk of a potential showdown between Angela Rayner, the deputy prime minister, and Wes Streeting, the health secretary. Rayner, who played a key role in the decision to abandon the welfare legislation, insisted that she did not want the top job. “Not a chance,” she told Lorraine on ITV. “It’ll age me by ten years within six months.”

The Times