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8 hours ago
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Rachel Reeves has said she is not going to let her critics get her down after a bruising week of speculation about whether she could be ousted as chancellor.
Reeves said she is qualified for the job and has the ideas to turn things around, amid worries about falling business confidence and the rising cost of government borrowing.
“I haven’t taken it personally this week. It’s political,” she said on the BBC’s Political Thinking with Nick Robinson. “Some people don’t want me to succeed. Some people don’t want this government to succeed. That’s fair enough. That’s their prerogative. But I’m not going to let them get me down. I’m not going to let them stop me from doing what this government has got a mandate to do, and that is to grow the economy, to make working people better off.
“People have been through a tough time the last few years. The cost of living crisis has taken its toll. Our economy has not been competitive enough. People’s wages have stagnated. We’ve got a lot of work to do.”
Reeves was also pressed on whether her decisions to raise national insurance for employers had dented business confidence.
She defended her choice, saying: “What was the alternative?”
“Of course, all decisions have consequences,” she said. “But imagine the alternative. Imagine that I hadn’t addressed that problem. And now when financial markets look at the UK, they would be saying this is a government that is not real about the situation that it faces. It is spending more money than it is bringing in. It’s having to borrow more and more.
“And I wasn’t willing to sweep under the carpet very real problems that we faced on the fiscal side. And the numbers didn’t add up. They now add up with me as chancellor. And I swore, I promised, that I would never play fast and loose with the public finances like the previous government.”
Asked whether she was happy to be portrayed as an “iron chancellor”, Reeves said: “If people want to describe me as that … but I will make the right decisions. I’m happy to be the iron chancellor, if that’s what you want to call me.”
Reeves has been under pressure after turbulence in the markets, but was given some breathing room by Wednesday’s cooling inflation figures, which helped lower the UK’s borrowing costs on the financial markets. However, the wider increase over the past few months still puts her in danger of breaking her self-imposed fiscal rules.
Reeves has considered deeper cuts to public spending in response, while investors say tax increases could be required to balance the books.
Speculation about Reeves’s future was further fuelled this week when Starmer said he had “full confidence” in her and that she was doing a “fantastic job” but declined to say whether she would still be his chancellor by the end of this parliament.
The prime minister’s spokesperson later confirmed that Reeves would remain in post right up to the next general election. “He has full confidence in the chancellor and he’ll be working with her in the role for the whole of this parliament,” he said.
