BBC
Chancellor Rachel Reeves said she has now reached spending deals with all departments ahead of her highly anticipated Budget on October 30.
This follows reports of disputes between the Treasury and several departments over the expected scale of spending cuts.
Reeves told BBC Radio 5's Matt Chorley that she had made deals with all her cabinet colleagues – and, in keeping with tradition, she had popped all the balloons placed in the Treasury to represent the funding deal for each department.
While sympathizing with “the mess” his colleagues had inherited, Reeves insisted departments needed to find savings to balance the budget.
In recent budgets, chancellors have adopted the tradition of hanging balloons in the office of the chief secretary to the Treasury to represent spending deals that need to be negotiated with departments.
As settlements are completed, the balloons pop.
In the exclusive interview, Reeves said: “There are no more balloons in the chief secretary's office – the balloons have popped.”
As the Budget approaches, there have been growing reports of unease within Cabinet over the spending cuts needed to meet the Treasury's target of finding £40 billion in savings.
Sky News reported that the Treasury had missed an original deadline of October 16 to finalize all major budget measures to be submitted to the spending watchdog, the Office for Budget Responsibility, before the Budget.
Deputy Prime Minister Angela Rayner, who heads the Ministry of Housing, Communities and Local Government, as well as Justice Secretary Shabana Mahmood and Transport Secretary Louise Haigh have all reportedly written to Sir Keir Starmer to complain about the the scale of the budget cuts their ministries were facing. .
Haigh has since told the BBC that she did not write a letter, but carried out budget negotiations with the Treasury “in the normal way”.
Responding to reports that his colleagues had taken their concerns about budget cuts directly to the Prime Minister, Reeves said: “I wouldn't believe everything you read” in the media.
But she added that it was “entirely reasonable for Cabinet colleagues to make their case – both to me, as Chancellor, and to the Prime Minister, about the scale of the challenges they face in their ministries”.
“I’m very sensitive to the mess my colleagues inherited,” Reeves said.
“But any extra money, ultimately, has to be paid for either by taking money from other departments or by raising taxes.”
Taxes on “workers”
The Labor manifesto promised not to increase rates of income tax, national insurance or VAT to protect “working people”.
Labor also campaigned on a pledge not to “return to austerity”, the program of drastic spending cuts and tax rises aimed at reducing the UK's budget deficit, pursued by the Conservative coalition -liberal-democrat of 2010.
“All of these things mean we have to find additional funding,” Reeves said.
Reeves admitted that meant she was considering making changes to “other taxes to make sure the amounts add up.”
“We were clear during the election campaign: we cannot repair 14 years of damage in a single budget or in just a few months,” she said.
“It will take time to rebuild our public services to ensure workers are better off and repair the foundations of our economy and society.”
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Rachel Reeves says it is “entirely reasonable” for her colleagues to debate budget cuts with her or with Prime Minister Sir Keir Starmer.
As she seeks to balance Labor's first budget in 14 years, Reeves admitted she is speaking to several major political figures.
“I speak to Gordon regularly – I also speak to Tony Blair regularly,” she said.
She also has a “good relationship” with her predecessor Jeremy Hunt, regularly sending messages to the Conservative shadow chancellor.
“I may not be particularly impressed with the state of public finances he left me with, but I recognize that after Kwasi Kwarteng he also had a tough job to do,” she said .
The only person she wishes she could “phone now” is Alistair Darling, the last Labor chancellor to present a Budget – who died last year aged 70.
Lord Darling served in cabinet for 13 years under Blair and Brown, and was best known as the chancellor who led the UK through the 2008 financial crisis.
“I hope he will be proud of what I do as the next Labor chancellor after him,” she said.
Reeves spoke of her pride in being the first female chancellor in the role's 800-year history.
Becoming chancellor was “beyond what a girl like me, from the ordinary background I come from, could have dreamed of,” Reeves said.
Now, in her “dream job,” Reeves said, “one of the wonderful things in the first few months of this job is meeting female finance ministers from around the world” — like U.S. Treasury Secretary Janet Yellen and Chrystia Freeland. , the Canadian Minister of Finance.
“I take great inspiration from these extraordinary women and so many others,” Reeves said.
