RACHEL Reeves has refused to rule out spending cuts – just a day after the Prime Minister declined to say whether Labour would take the axe to public service budgets amid economic turbulence.
The Chancellor came under fire from all sides in the Commons on Tuesday on her return from China.
She had faced criticisms for being out of the country as a string of alarm bells were sounded from businesses – including warnings on hikes in food prices and market pressures putting intense strain on the public finances.
Labour are considering cutting public sector budgets in order to comply with their self-imposed fiscal rules, which limit the Government’s room for manoeuvre, The Guardian reported.
Speaking in the Commons, SNP Westminster leader Stephen Flynn (above) said: “Will the Chancellor of the Exchequer do what the Prime Minister refused to do yesterday and rule out future spending cuts?”
Reeves refused to be drawn, replying: “I’m not going to write five years worth of budgets in the first six months’ of Labour government.
“But I’m absolutely committed to meeting the fiscal rules in the Budget that I set out in October because we know what happens when governments lose control of the public finances and that is, they crash the economy and end up on that side of the house.”
John Grady, the Labour MP for Glasgow East, had a jibe about the SNP, adding in another question: “The Chancellor may be able to learn a bit about spending cuts from the Scottish Government in Holyrood, which has had three years of emergency spending budget cuts.”
Speaking afterwards, Flynn demanded that Labour "come clean" on whether they would impose "savage cuts to spending".
He said: "Scottish voters will well remember Anas Sarwar preaching and promising: 'Read my lips – no austerity under Labour.'
"But anyone reading the lips of Keir Starmer and Rachel Reeves in the last few days will be under the very clear impression that Labour austerity is on the way."
He added: "The Treasury are briefing in private that cuts are coming, but ministers won’t admit in public that their only remaining plan is for Labour austerity to follow 14 years of Tory austerity. “The Labour Party also need to start taking some responsibility for some of the circumstances they have created. They boxed themselves into a fiscal straight jacket on tax and shut off any route back to the EU single market – the biggest single roadblock to sustained economic growth.
"They ignored all the warnings – including over their National Insurance tax hike, and now we are all paying the price."
Starmer (below) twice refused to say outright whether he believed Reeves should remain in post, giving the headwinds buffeting the UK economy.
His spokesperson later clarified that the Prime Minister believed that the Chancellor would remain in the role “for the whole of this parliament”.
Giving a statement in Parliament, the Chancellor said the economic challenges facing the UK showed Labour should “go further and faster in our plan to kickstart economic growth”.
The Tories criticised Reeves’s deal struck with China, pointing out the assurances she had returned with amounted to £120 million a year for the next five years.
Shadow chancellor Mel Stride said: “The rise in our borrowing costs due to her disastrous Budget has added around £12 billion to our annual spending on debt interest alone – literally 100 times what she says she has brought back from Beijing.
“That is money that cannot now go on the public priorities, £12bn is enough to pay for 300,000 nurses, to cover Labour’s pernicious winter fuel payment cut for eight-and-a-half years.”
