Rachel Reeves urges Labour MPs to back her make-or-break budget

Rachel Reeves has privately urged Labour MPs to back her make-or-break budget, saying they will not like every measure but promising it will be “fair.”

Speaking to a fractious parliamentary party, after a fortnight of leadership speculation, the chancellor said “politics is a team sport” and promised there would be a package of appealing measures in the budget that they could present to their constituents.

“When you look at the distributional analysis you’ll see this is a Labour budget, a progressive budget, a budget I’m proud of,” Reeves told the gathered MPs.

But she told them it would be “a package not a pick and mix … you can’t say I like the cola bottles but not the fruit salad”. She said she believed Labour MPs would like at least 95% of the budget.

The chancellor met MPs in parliament on Monday night promising them that tax rises would be kept to a minimum and that the budget would prioritise cutting the cost of living, cutting NHS waiting lists and cutting the cost of debt, saying the last part was just as vital because of the need to lower borrowing costs to free up more money for public services.

The chancellor said she was “determined to keep the contributions people make as low as possible” and said businesses would benefit from action to cut the cost of living, meaning people would have more disposable income.

Reeves is expected to reveal in this week’s budget that the UK’s economic growth forecasts have been downgraded in each of the next five years despite the government naming growth as its number one mission at the last election.

“Cutting the cost of living was the thing that we all campaigned on, because we know that inflation reaching double digits, interest rates going through the roof, the economic instability under the previous government cost all our constituents dearly,” she said.

“We’ve increased the “national living wage” and the national minimum wage. We’ve protected the triple lock, increasing it last year and increasing it again from next April. We have properly funded free childcare commitments. We’re rolling out free breakfast clubs at primary schools for all children, and extending free school meals to an additional half a million children.

“But I know that there is more to do, which is why we have already announced a freeze in prescription charges and rail fares. But there is more we can – and will – do.

“On Wednesday, this will be a fair budget. It will be a budget that delivers strong foundations, secures our future and delivers on our promise of change.”

Reeves said she was determined to stay in her post and thanked MPs for supportive comments they had made about fighting misogyny in the media. “I’ll show the media, I’ll show the Tories, I will not let them beat me, I’ll be there on Wednesday, I’ll be there next year and I’ll be back the year after that,” she said to some cheers in the room.

Reeves is seeking a significant rise in headroom in Wednesday’s budget to allow her to meet her fiscal rules, aiming for as much as £20bn. Among the spending measures expected are the lifting of the two-child benefit cap and action to make cuts to energy bills, policies which are likely to be popular with MPs.

But since rejecting a long-trailed potential rise in income tax, the Treasury will seek to fill its fiscal hole with a string of different tax measures, including a potential new property levy on high-value properties, an income tax threshold freeze for two more years, a pay-per mile-scheme for electric cars and measures to make salary sacrifice schemes less generous.

The chancellor said that budget speculation in the run up to Wednesday had been “incredibly destabilising” – and compared it to the previous year’s budget, where rumours were run about pension reforms that contributed to people taking out lump sums early and then the reforms were not enacted. “They are not serving their readers at all,” Reeves told MPs.

Reeves said the Office for Budget Responsibility’s report on Wednesday would conclude that a downgrade of productivity was a result of Brexit and the Conservative’s austerity measures – and would say explicitly that it was not due to the policies of the current government.