Chancellor Rachel Reeves has urged Labour MPs to rally behind her “fair and progressive” Budget, warning that while not every measure would be universally popular, the package must be backed in full to deliver the government’s economic agenda.
Addressing a tense meeting of the parliamentary Labour Party after two weeks of leadership speculation, Reeves told MPs that “politics is a team sport” and insisted the Budget would contain policies they could sell confidently to 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,” she said. However, she warned MPs that the measures must be taken “as a package, not a pick and mix”, telling them: “You might like 95% of it and dislike 5%, but we have to deliver this together.”
Reeves assured MPs that tax rises would be “kept to a minimum”, with the Budget focused on cutting the cost of living, reducing NHS waiting lists and lowering the cost of government debt. She argued that bringing down borrowing costs was essential to freeing up money for public services.
The Chancellor stressed she was “determined to keep the contributions people make as low as possible”, adding that support for household budgets would filter through to consumer spending and boost business activity.
Reeves is expected to confirm on Wednesday that the UK’s economic growth forecasts have been downgraded in each of the next five years, despite Labour making economic growth its central mission at the last election.
She defended Labour’s record since taking office, highlighting increases to the national living wage, protection of the triple lock, expansion of free childcare, free breakfast clubs in primary schools and extended free school meals to another half a million children. Recent freezes on prescription charges and rail fares were also flagged as evidence of early progress.
“But I know there is more to do,” she told MPs. “On Wednesday, this will be a fair Budget… one that delivers strong foundations, secures our future and delivers on our promise of change.”
Reeves also moved to quash rumours about her political future, vowing to stay in post and thanking colleagues for their support amid what she described as misogynistic media attacks. “I’ll show the media, I’ll show the Tories — I will not let them beat me,” she said to cheers.
The Chancellor is seeking to create up to £20 billion of fiscal headroom to meet her self-imposed rules. Popular measures expected include lifting the two-child benefit cap and action to cut energy bills.
After ruling out an income tax rise, Reeves is instead expected to rely on a string of smaller tax measures — including a possible high-value property levy, freezing income tax thresholds for two more years, a pay-per-mile charge for EVs and tighter rules on salary sacrifice schemes.
She also criticised the media’s handling of Budget speculation, saying rumour-driven reporting had been “incredibly destabilising”.
Reeves said the Office for Budget Responsibility’s report, due to be published alongside the Budget, would confirm that the UK’s productivity downgrade stems from Brexit and Conservative-era austerity, not the policies of the current government.
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Rachel Reeves urges Labour MPs to unite behind her ‘make-or-break’ Budget