UK Government Turmoil: Starmer Backs Treasury Chief Amid Fiscal Crisis and Welfare U-turn Fallout

British Prime Minister Keir Starmer has publicly reaffirmed his confidence in Treasury chief Rachel Reeves, just a day after her emotional appearance in Parliament fueled intense speculation about her position. The move comes as the Labour government grapples with the fallout from a series of embarrassing policy reversals that have undermined its fiscal agenda.

Reeves was visibly distressed during Prime Minister’s Questions on Wednesday, a day after the government was forced into a significant U-turn on its welfare spending cuts. Her tearful appearance sparked widespread rumors about her future, with observers noting her apparent exhaustion and upset. While the Treasury attributed her distress to a ‘personal matter,’ the incident has magnified concerns about the administration’s stability.

Initially hesitant to confirm Reeves’ long-term security when pressed by opposition leader Kemi Badenoch, Starmer later issued a robust defense, insisting she has his ‘full backing’ and will remain Chancellor ‘for a very long time to come.’ He dismissed suggestions that her emotional state was politically motivated, telling the BBC she has done an ‘excellent job’ attracting investment.

This public display of support comes amid a turbulent period for Starmer’s administration, which is nearing its one-year anniversary in power. The government was forced on Tuesday to significantly water down its welfare spending reforms, designed to save £5 billion annually, following a rebellion by 49 Labour lawmakers. This U-turn, coupled with a similar reversal in May on heating subsidies, leaves the Treasury facing a significant funding gap and raises the specter of future tax increases, despite earlier pledges. The fiscal uncertainty has already impacted markets, with the pound falling and borrowing costs rising.

The domestic struggles are a stark contrast to Starmer’s foreign policy successes, including rallying support for Ukraine and securing a trade deal with the US. However, persistent high inflation and sluggish economic growth at home continue to challenge his authority and approval ratings, making the stability of his Treasury team crucial.

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