Rachel Reeves has not offered her resignation and is “going nowhere”, Downing Street has said, following her tearful appearance in the House of Commons.
A Number 10 spokesperson said the chancellor had the “full backing” of Sir Keir Starmer, despite Ms Reeves looking visibly upset during Prime Minister’s Questions.
Politics latest: ‘A moment of intense peril’ for PM
A spokesperson for the chancellor later clarified that Ms Reeves had been affected by a “personal matter” and would be working out of Downing Street this afternoon.
Politics latest: Reeves looks visibly upset in Commons
Downing Street’s insistence came despite Sir Keir refusing to guarantee that Ms Reeves would stay as chancellor until the next election following the fallout from the government’s recent welfare U-turn.
Tory leader Kemi Badenoch branded the chancellor the “human shield” for the prime minister’s “incompetence” just hours after he was forced to perform a humiliating U-turn over his controversial welfare bill.
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Speaking at Prime Minister’s Questions, Ms Badenoch said: “This man has forgotten that his welfare bill was there to plug a black hole created by the chancellor. Instead they’re creating new ones. “
Turning to the chancellor, the Tory leader added: [She] is pointing at me – she looks absolutely miserable.
“Labour MPs are going on the record saying that the chancellor is toast, and the reality is that she is a human shield for his incompetence. In January, he said that she would be in post until the next election. Will she really?”
Not fully answering the question, the prime minister replied: “[Ms Badenoch] certainly won’t.
“I have to say, I’m always cheered up when she asks me questions or responds to a statement because she always makes a complete mess of it and shows just how unserious and irrelevant they are.”
Mrs Badenoch interjected: “How awful for the chancellor that he couldn’t confirm that she would stay in place.”
The prime minister’s watered-down Universal Credit and Personal Independent Payment Bill, aimed at saving £5.5bn, was backed by a majority of 75 in a tense vote on Tuesday evening.
A total of 49 Labour MPs voted against the bill – the largest rebellion in a prime minister’s first year in office since 47 MPs voted against Tony Blair’s Lone Parent benefit in 1997, according to Professor Phil Cowley from Queen Mary University.
After multiple concessions made due to threats of a Labour rebellion, many MPs questioned what they were voting for as the bill had been severely stripped down.
They ended up voting for only one part of the plan: a cut to Universal Credit (UC) sickness benefits for new claimants from £97 a week to £50 from 2026/7.
Ms Badenoch said the climbdown was proof that Sir Keir was “too weak to get anything done”.
Ms Reeves has also borne a lot of the criticism over the handling of the vote, with some MPs believing that her strict approach to fiscal rules has meant she has approached the ballooning welfare bill from the standpoint of trying to make savings, rather than getting people into work.
Experts have now warned that the welfare U-turn, on top of reversing the cut to winter fuel, means that tax rises in the autumn are more likely – with Ms Reeves now needing to find £5bn to make up for the policy U-turns.
Asked by Ms Badenoch whether he could rule out further tax rises – something Labour promised it would not do on working people in its manifesto – Sir Keir said: “She knows that no prime minister or chancellor ever stands at the despatch box and writes budgets in the future.
“But she talks about growth, for 14 years we had stagnation, and that is what caused the problem.”
