Deputy prime minister Angela Rayner, home secretary Yvette Cooper and justice secretary Shabana Mahmood were among senior ministers who raised concerns about the looming spending review at a “tense” session of cabinet on Tuesday, according to people with knowledge of the meeting.
A “large minority” of the cabinet protested about planned spending reductions in their own departments as chancellor Rachel Reeves looks for savings to make her fiscal sums add up, one of the people added.
Ministers also flagged worries about plans for up to £6bn of welfare cuts expected to be set out next week by work and pensions secretary Liz Kendall.
Energy secretary Ed Miliband and leader of the House of Commons Lucy Powell were among those who raised concerns over these, the people said.
Prime Minister Sir Keir Starmer allowed the meeting to go on longer than usual because of the strength of feeling in the room inside Downing Street. 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 that various challenges were raised by a large number of senior ministers. Another said: “It was tense but it was collegiate and professional.”
Darren Jones, Treasury chief secretary, is leading a spending review — to conclude in June — which will cover three years of departmental spending. Those unprotected departments, such as environment, local government and justice, have been asked to model real-terms cuts of up to 11 per cent.
During the cabinet meeting, Mahmood set out the case for why the looming spending squeeze would be tough for the Ministry of Justice, which has endured long-running budget cuts and oversees a prison system that is almost at full capacity. Cooper also set out the potential impact of the further tightening to the Home Office’s operations and questioned whether this could undermine the government’s priorities of ensuring safer streets and secure borders, which includes police forces.
David Lammy, foreign secretary, told colleagues that those concerns should be taken seriously. However, he also supported Reeves’ drive for fiscal discipline, noting that Labour governments have historically lost when they spend too much money.
Rayner, who is also the housing secretary, is understood to be concerned that the tight spending review could leave her ministry with insufficient funding for attempts to increase housebuilding — including social housing — during this parliament, one of the Labour government’s core aims.
At one point Peter Kyle, the science secretary, was defending the leadership’s austere approach — only to be interrupted by Powell, according to those familiar with the discussion.
Rayner flagged the growing worries among Labour MPs about the depth of the cuts to the benefit system — which include radical reforms that the last Tory government blanched at during the “austerity” years a decade ago.
“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. 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 for shaking up the welfare system, with Claire Reynolds — Starmer’s head of liaison with MPs — leading a slideshow showing the growing costs of generous benefits. She 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 from making it harder for people to qualify for “personal independence payments” or 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.”
Another Labour MP said: “Number 10 are very worried. They keep emailing us and the whips are in touch. 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.”
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.
The cuts to benefits are causing trepidation among scores of MPs because they come in the wake of plans to halve the international aid budget to pay for a rise in defence spending as well as cuts last summer to pensioners’ winter fuel payments.
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.
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 that Britain’s fiscal rules will not be relaxed to avert painful welfare cuts, in spite of growing party pressure for the UK to follow Germany in turning on the borrowing taps. The prime minister believes 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.
