Keir Starmer stresses 'full confidence' in Reeves as PM 'refuses' to say if she'll stay chancellor at next election

13 January 2025, 15:51 | Updated: 13 January 2025, 15:53

Keir Starmer has leapt to chancellor Rachel Reeves' defence as pressure grows over market turmoil.
Keir Starmer has leapt to chancellor Rachel Reeves' defence as pressure grows over market turmoil. Picture: Getty

By Jacob Paul

Sir Keir Starmer has insisted that Rachel Reeves has his “full confidence” as the chancellor faces growing pressure for Britain's turbulent economy, but refused to comment on her future position as Treasury chief.

Listen to this article

Loading audio...

The prime minister’s defence of the chancellor comes as the pound plunged in value, the lowest against the dollar since November, while concerns over increased government borrowing mount. 

Meanwhile, 30-year government bonds jumped to a fresh 27-year high, extending a gilt market sell-off into a second week just as the Chancellor touched back down in Britain following her China visit.

Sir Keir said Ms Reeves has the whole Labour Party behind her as turmoil in the markets erupts.

Speaking at the launch of the government’s artificial intelligence action plan, he said: “Rachel Reeves is doing a fantastic job.

“She has my full confidence. She has the full confidence of the entire party.”

Read more: Rachel Reeves 'eyeing hotel tax and disability welfare cuts' in frantic bid to stabilise public finances

Read more: UK will be ‘AI superpower’, says Starmer as he unveils plans to boost growth

Prime Minister Keir Starmer made the remarks during a visit to the Manufacturing Futures Lab at UCL (Unnivesrity College London) in London.
Prime Minister Keir Starmer made the remarks during a visit to the Manufacturing Futures Lab at UCL (Unnivesrity College London) in London. Picture: Alamy

He added that she was “given an incredibly challenging job at the budget” due to a broken economy and a £20 billion fiscal black hole he claims was left behind by the Tories. 

Sir Keir argued there are “many, many things that have been identified for spending which didn’t have any spending attached to them.”

He continued: “So she took the tough decisions. She’s right to take the tough decisions, because, as anybody who’s turned around a business or organisation will know, if you’re going to turn something around, you’ve got to take the tough decisions first, you can’t identify a tough decision, then decide to put it off for six months or a year.”

The prime minister also refused to clarify whether Ms Reeves would still be his chancellor by the end of this parliament.

When asked for a simple “yes” or “no” response, he swerved the question with a remark on Reeves’ commitment to her fiscal rules. 

Sir Keir told reporters: ““We are going to stick to the fiscal rules, that is a very important thing that we have said throughout. We set out those fiscal rules very early on in the day because we knew that the missing ingredient in recent years has been economic stability.”

Critics have warned this could risk spooking the markets at a time when government bonds are at the highest level they have been in nearly 30 years. 

Concerns about inflation and the imminent Donald Trump presidency have prompted turmoil on global markets in recent days. The pound at 9am today was 1.2141 dollars compared to 1.2212 dollars at the previous close.

An unnamed Labour MP told the Telegraph Sir Keir's refusal to comment on Ms Reeves’ future position was a ‘bad mistake’ which he could ‘repent’. 

Reeves was in China last week while the UK economy came under mounting pressure.
Reeves was in China last week while the UK economy came under mounting pressure. Picture: Getty

But other Labour figures have leapt to her defence. 

Cabinet Office minister Pat McFadden told LBC this morning that Ms Reeves’ Budget had taken some ‘punches’ but that it would help raise money for public services.

He told Nick Ferrari: “Rachel Reeves is the Chancellor for a good reason. She is the person qualified to do the job.“When we came into office six months ago, we came in as a good team , we didn’t have any of the rivalries and things that had afflicted other governments and we govern as a good team.

“Rachel Reeves is doing a good job with the support of the whole Cabinet.”

Ms Reeves has also vowed to stand by her fiscal rules laid out in the October budget, calling them “non-negotiable”.

More Latest News

See more More Latest News

James Messham, 60, died on the MSC Virtuosa after an "alternation".

Second man arrested in connection with death of 60-year-old on cruise ship

Zelenskyy says Ukraine is ready to meet with Russia for peace talks

Ukraine 'ready to meet' Russia after Putin call for peace talks on Thursday, says Zelenskyy

GB sticker with european stars on the back of a car

Portugal warns Brits not to bring ‘illegal’ device owned by millions on their holidays

India and Pakistan ceasefire holds despite multiple 'violations' -  as further details of deal emerge

India and Pakistan ceasefire holds despite multiple 'violations' - as further details of deal emerge

Exclusive
The Home Secretary has called prison safety a "disgrace"

'There's a crisis': Yvette Cooper brands prison safety a 'total disgrace' following Axel Rudakubana officer attack

Stansted Airport hit by widespread power outage as IT glitch causes travel chaos

Stansted Airport hit by widespread power outage as IT glitch causes travel chaos

The fire is at an electrical substation just off Fore Street

Hundreds without power as firefighters tackle latest substation blaze weeks after Heathrow outage

annik Sinner of Italy in action against Mariano Navone of Argentina during the Internazionali BNL d'Italia day six at Foro Italico on May 10

Tennis world number one Jannik Sinner wins on return from doping ban to progress at Italian Open

Allied leaders made “material progress” towards a ceasefire in Ukraine on Saturday, Sir Keir Starmer has said

Starmer says leaders made ‘material progress’ towards peace as Putin proposes restarting talks with Ukraine

Baby Reindeer (2024) mini TV series created by Richard Gadd and starring Jessica Gunning and Richard Gadd

Mr Bates Vs The Post Office and Baby Reindeer in running for top TV Bafta awards

Natterjack toad  adult during breeding season in the Brenne Regional Nature Park, France

UK’s noisiest amphibians who can be heard a mile away making ‘remarkable comeback’ in South Downs

Russian President Vladimir Putin

Putin proposes restarting peace talks with Ukraine ‘without preconditions’ after European leaders threaten sanctions

Presentation of Partnership for Strong Ukraine Foundation (PSUF)

Sweden’s new national security adviser quits within 24 hours of taking up post after Grindr photo scandal

Southport triple killer Axel Rudakubana's supervision was downgraded before he allegedly 'hurled boiling water over a prison officer' at HMP Belmarsh, according to reports.

Southport killer Axel Rudakubana’s supervision was downgraded before ‘pre-planned attack’ on prison officer

Young person eating burger

Just five minutes of exposure to junk food advertising per day makes children eat more calories

First-time buyers who receive assistance are able to buy a home at an average age of just over 30, with an average household income of £56,000.

First-time buyers with help from ‘bank of mum and dad’ buy homes £40k more expensive, despite lower incomes