Starmer's Support for Reeves amid Government U-Turns on Welfare Spending

On Wednesday, the office of British Prime Minister Keir Starmer confirmed that Treasury chief Rachel Reeves is secure in her role, even after a sequence of government U-turns affected her strategy for raising revenue. Speculation surrounding Reeves' job arose when she appeared emotional in the House of Commons, particularly after the government's recent reversal concerning welfare cuts that had drawn significant criticism.

Although initially hesitant to affirm her job security when questioned by opposition leader Kemi Badenoch, Starmer’s press secretary later assured that Reeves "is going nowhere" and has the prime minister's complete support. The Treasury has indicated that Reeves is currently handling a "personal matter," though further details were not shared.

On Tuesday, Starmer's government was compelled to retract its plans to limit welfare spending to placate dissenting lawmakers within its ranks. Ultimately, the legislation managing to pass through the House of Commons was considered a hollow victory, as it involved modifying the proposed cuts to welfare benefits for disabled individuals, resulting in 49 Labour members opposing the bill.

This turn of events significantly undermines Starmer's authority as he approaches the one-year mark since his election, amid the challenges of sluggish economic growth and poor approval ratings. The Treasury now faces a financial shortfall that could necessitate tax hikes despite prior commitments not to increase key taxes such as income and sales tax.

The government had anticipated that the welfare reform would yield savings of 5 billion pounds (approximately $7 billion) annually; however, with the latest alterations, it remains uncertain if any savings will be achieved. This recent setback follows an earlier decision made in May to abandon a proposal that would have ended winter heating subsidies for numerous retirees, which Reeves had also counted on as part of her financial strategy.