Keir Starmer is gathering his Cabinet today after bolstering his control of economic policy in an humiliation for Rachel Reeves.
The PM’s new-look top team will assemble in Downing Street amid fears the ground is being laid for another brutal tax raid at the Autumn Budget.
The dramatic overhaul yesterday saw Sir Keir poach the Chancellor’s deputy to become his own ministerial enforcer, and install two economics experts in No10.
The move came after alarm that the premier was ‘blindsided’ by the Treasury on plans to slash winter fuel payments and curb benefits – which ended in disastrous U-turns.
But the Tories warned that left-wing ‘tax fanatics’ had been brought in to conduct a ‘radical socialist takeover’ as Labour faces a black hole of up to £50 billion in the public finances.
MPs have been heaping on pressure for ‘wealth taxes’ to fund fresh spending splurges.
Keir Starmer’s new-look top team will assemble in Downing Street amid fears the ground is being laid for another brutal tax raid at the Autumn Budget
Angela Rayner made a flamboyant appearance in Downing Street this morning amid the furore over her property dealings
John Healey and Ed Miliband were at Cabinet this morning
Education Secretary Bridget Phillipson attended the Cabinet gathering this morning
The PM is gathering his Cabinet today after bolstering his control of economic policy in an humiliation for Rachel Reeves
Home Secretary Yvette Cooper tried to cool speculation that Ms Reeves has been effectively kneecapped in a round of broadcast interviews this morning
The tax burden is due to hit a new record high as Labour tries to cover spending
The problems became even more stark today as markets drove up borrowing costs on the UK’s debt mountain in response to the political manoeuvring, with Tories warning the country is ‘broke’ and must rein in spending.
Yields on 30-year UK bonds, known as gilts, leapt to just below 5.7 per cent, the highest level since 1998.
Higher yields mean investors are charging more money to lend to the UK – adding to the Chancellor’s Budget headache.
Mutterings are also growing on the Labour benches that Sir Keir himself and a lack of direction is the fundamental issue.
Home Secretary Yvette Cooper tried to cool speculation that Ms Reeves has been effectively kneecapped in a round of broadcast interviews this morning.
‘I don’t think so at all. Quite the reverse. I think the Prime Minister and the Chancellor have always worked extremely closely together and continue to do so,’ she said.
Asked if there would be more input into the coming autumn budget from No 10 than previously, Ms Cooper replied: ‘In my experience through successive chancellors through very many years, ultimately, the chancellor always writes the budget, because that’s the nature of the complex mix of things, but always with conversations and discussions with the Prime Minister throughout, so you get that strong support.’
Downing Street insisted the PM and Ms Reeves will continue to work ‘in lockstep’.
The Chancellor will try to regain traction this week by arguing that investment and training can boost flagging economic growth.
However, Sir Keir appears to have abandoned his previous approach of subcontracting economic policy to Ms Reeves.
Former Tory cabinet minister Sir James Cleverly suggested the changes signal that the PM is ‘getting ready to throw Rachel under the bus in the proper reshuffle that is inevitably coming’.
Labour MPs voiced scepticism about the success of the changes.
One told the Guardian: ‘Overall I think it is not something you can staff your way out of.
‘This is about the politics and the story we tell. All the comms and strategy people in the world won’t fix that.’
Sir Keir has poached Ms Reeves’ Treasury deputy Darren Jones to be his ministerial enforcer
Baroness Minouche Shafik has been hired as the PM’s Chief Economic Adviser in the latest revamp of No10’s top team
