Deputy prime minister Angela Rayner, home secretary Yvette Cooper and justice secretary Shabana Mahmood raised concerns about the UK government’s looming spending review at a “tense” cabinet session on Tuesday, people with knowledge of the meeting said.
According to one of the people, a “large minority” of Prime Minister Sir Keir Starmer’s cabinet protested about planned spending reductions in their own departments. Some also raised worries about plans for up to £6bn of welfare cuts expected to be set out next week.
Energy secretary Ed Miliband and leader of the House of Commons Lucy Powell also raised concerns over the cuts, the people said.
The review, which concludes in June, will determine three years of future departmental spending as chancellor Rachel Reeves looks for savings to make her fiscal sums add up.
Unprotected departments in areas including environment, local government and justice have been asked to model real-terms cuts of up to 11 per cent.
At the cabinet meeting — which is attended by 27 senior ministers — some ministers questioned whether taxes could be raised again as an alternative to spending cuts.
The mooted reductions follow plans to halve the international aid budget to pay for a rise in defence spending, as well as unpopular cuts to pensioners’ winter fuel payments.
“Number 10 are very worried,” said a Labour MP. “There’s a sense that they may row back. They didn’t get the strength of feeling but they do now. People are worried they might lose their seats.”
Reeves faces the added challenge of sluggish economic growth in the lead-up to a high-stakes Spring Statement this month. On Friday, monthly GDP figures showed an unexpected 0.1 per cent contraction in January.
The people with knowledge of Tuesday’s cabinet meeting said Rayner had raised Labour MPs’ worries about the depth of the cuts to the benefit system — which include radical reforms that the former Conservative government blanched at during the “austerity” period a decade ago.
In addition, Rayner is understood to be concerned that the spending review could hamper plans to increase housebuilding — including social housing — during this parliament, one of the Labour government’s core aims.
Mahmood argued that the spending squeeze would be tough for the Ministry of Justice, which has endured long-running budget cuts and oversees a prison system almost at full capacity.
Cooper questioned whether further tightening to the Home Office’s operations could undermine the government’s priorities of ensuring safer streets and secure borders, which includes police forces.
The people added that Starmer allowed the meeting to go on longer than usual because of the strength of feeling in the room. Multiple government figures talked to the Financial Times about the meeting but all asked to speak off the record.
One person familiar with the cabinet meeting said various challenges were raised by a large number of senior ministers. Another said: “It was tense but it was collegiate and professional.”
David Lammy, foreign secretary, told colleagues that the concerns expressed by Mahmood and Cooper should be taken seriously.
But he also supported Reeves’ drive for fiscal discipline, arguing that Labour governments have historically lost when they spend too much money.
Peter Kyle, science secretary, defended the leadership’s austere approach — only to be interrupted by Powell, according to those familiar with the discussion.
“There was a pretty consistent message from Shabana Mahmood and Yvette Cooper and Angela Rayner, and others,” said one person close to the talks.
“Every department has difficult choices ahead,” they added. “That doesn’t mean that people were ‘complaining’, they are sympathetic to Rachel’s task, they were just explaining that they have spending pressures.”
Number 10 has been inviting large batches of Labour MPs into the building for briefings about the need to shake up the welfare system. Claire Reynolds, Starmer’s head of liaison with MPs, has been presenting a slideshow showing the growing costs of generous benefits.
The people said Reynolds told attendees that the number of economically inactive people in Britain was financially unsustainable for the government.
Ministers are planning to find most of their proposed savings by making it harder for people to qualify for “personal independence payments” (PIPs), the cost of which has doubled in half a decade.
But those meetings have failed to quell the unhappiness among many MPs. “I know that the backlash is wide and serious,” said one usually loyalist new backbencher.
Brian Leishman, a new Labour MP, warned that cutting disability benefits would show a “basic lack of humanity”, adding: “The rumoured £6bn worth of cuts will be absolutely devastating, especially for some of the most vulnerable and disadvantaged people in our society.”
One mooted compromise would be to strengthen payments to long-term disabled people who are seen as having no chance of returning to the workplace, according to people close to the talks.
In her slideshow presentation, Reynolds told MPs that one of the five core principles of Starmer’s approach to welfare would be “always protecting people with the most severe disabilities”, according to attendees.
One government figure said that no one in the room disputed the need to maintain the current fiscal rules. “No mutiny,” they said. “No member of the cabinet said we shouldn’t reform welfare or keep our fiscal rules.”
Starmer has warned Labour MPs the fiscal rules will not be relaxed to avert painful welfare cuts, despite growing party pressure for the UK to follow Germany in turning on the borrowing taps.
The prime minister argues any relaxation of the self-imposed restriction would spook markets and force up borrowing costs.
“There was lots of support for the fiscal rules but not for tough choices in the policy areas of individual ministers,” one government official told the FT.
2025-03-14 14:10:00
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