Keir Starmer was forced to guarantee Rachel Reeves will keep her job for “many years to come”, in a bid to end financial and political turmoil following her tears in Parliament. But Labour insiders said the Prime Minister’s authority was in tatters with former Cabinet Minister Ed Balls warning: “It’s been the worst week for Labour governments for a long time”.
The Chancellor made a surprise appearance alongside the Prime Minister at the launch of the Government’s 10 Year Health Plan, with the pair hugging in a public show of unity. It came after Sir Keir triggered a slump in the value of the pound and long-term government bonds, pushing up the price of government borrowing, by failing to back Ms Reeves on Wednesday as she wept beside him.
He struck a different tone in a London health centre, watched by Ms Reeves and Health Secretary Wes Streeting, giving his Chancellor the credit for NHS reforms – and promising not to sack her. The Prime Minister said: “It’s just fantastic she’s here and none of this would be happening if she hadn’t taken the decisions that she’s taken.
“So she took those decisions, and she would take them for many years to come.”
Sir Keir, who celebrates 12 months as Prime Minister on Saturday, insisted he had not meant to undermine Ms Reeves by failing to back her in the face of hostile questioning from Conservative leader Kemi Badenoch earlier in the week The Prime Minister said he simply hadn’t noticed the Chancellor’s distress during exchanges in the House of Commons,
Bond markets rallied as it appeared Ms Reeves would now be safe when a Cabinet reshuffle takes place, despite a series of blunders including cuts to winter fuel allowances, which Labour has partially reversed, and an attempt to reduce the number of people claiming Personal Independence Payments, now postponed indefinitely pending a review.
The Chancellor smiled as she delivered her own speech about NHS reforms, insisted she was “totally” up for the job of Chancellor.
Dismissing reports of a rift with the Prime Minister, she said: “I think that people can see that Keir and me are a team.”
Repeating claims that her emotional appearance earlier this week had been down to “a personal issue”, Ms Reeves said: “I happen to be on camera when I have a tough day.”
Mr Balls, a former education secretary who served as Shadow Chancellor, said the benefits u-turn was “a huge blow to the Exchequer, but then also for the Prime Minister.”
Warning that Sir Keir had lost the authority to push through difficult policies, Mr Balls told the Political Currency podcast: “The next time the Prime Minister says, ‘We must take big, long term decisions for the future’, the backbenches will say, ‘Well, that’s what you said to us last time’.”
Conservatives said the Prime Minister “completely bungled it” by failing to back his colleague. Shadow chancellor Mel Stride, who sent his Labour rival a text message of support, said: “There’s so much brutality in politics, and you see it from other politicians. You see it from the press, the media, social media, and so on. But never to forget that people are ultimately human beings.”
He also warned the Government was incapable of cutting the UK’s soaring benefits bill, with expenditure on working-age incapacity and disability benefits due to reach £70 billion by the next election, thanks to an “unholy alliance” of rebellious Labour backbenchers and Reform, Lib Dem and Green MPs opposing cuts.
Experts said the decision to abandon cuts to disability benefits had made tax increases more likely when Ms Reeves delivers her autumn Budget. Paul Johnson, Director of the Institute of Fiscal Studies, said: “She really is caught a bit between a rock and a hard place on this.”
Questions about the Chancellor’s future overshadowed the launch of the NHS plan, a key plank of what Labour calls its “plan for change”, which includes measures to end the 8am scramble to see a GP. An improved and expanded NHS app will allow patients to book appointments without early-morning phone calls and will also provide health advice directly, reducing the need to see a doctor.
New neighbourhood health centres will be created, open 12 hours a day and six days per week, so that more treatment is provided outside of hospitals.
In addition, the NHS will provide “weight loss medication” to cut obesity, while junk food advertising targeted at children will be restricted, sales of high-caffeine energy drinks to under 16-year-olds will be banned and large food firms will be obliged to produce reports revealing how healthy their products are.
The measures were backed by some health professionals. Dr Jeanette Dickson, Chair of the Academy of Medical Royal Colleges, said: “The ambition, scale and innovative approaches set out in the 10 Year Health Plan can only be applauded. It promises a lot and properly implemented, offers an opportunity to revolutionise healthcare.”
Free market think tank the Institute of Economic Affairs welcomed the promise to improve the NHS app but said the Government was planning to regulate more aspects of everyday life. Editorial Director Kristian Niemietz said: “The worst part of the document is the section on prevention, a word which always sounds good, but which, in practice, mostly means government officials meddling with what we eat and drink, when they should really just leave us alone and mind their own business.”