Senior ministers in Prime Minister Sir Keir Starmer’s cabinet have voiced strong concerns over the UK government’s impending spending review, raising alarms about potential departmental budget reductions and significant welfare cuts.
At a cabinet meeting on Tuesday, Deputy Prime Minister Angela Rayner, Home Secretary Yvette Cooper, and Justice Secretary Shabana Mahmood were among those who pushed back against the proposed financial tightening, sources familiar with the discussions revealed.
According to insiders, a “large minority” of ministers opposed the planned cuts, particularly the anticipated £6bn reduction in welfare spending, expected to be detailed next week. Energy Secretary Ed Miliband and Commons Leader Lucy Powell also expressed concerns.
Departments Brace for 11% Budget Reductions
Chancellor Rachel Reeves is spearheading the review, which is set to conclude in June, as she seeks to balance the fiscal books.
Unprotected departments—including environment, local government, and justice—have been asked to prepare for potential real-terms budget cuts of up to 11%.
During the meeting, some ministers questioned whether tax hikes could be an alternative to deep spending reductions.
The proposed cuts follow controversial measures such as halving the international aid budget to fund increased defence spending and reducing pensioners’ winter fuel payments.
“There’s real concern inside No. 10,” one Labour MP disclosed. “They underestimated the strength of feeling. Ministers fear these cuts could cost them their seats.”
Cabinet Fractures Over Welfare Cuts and Policy Priorities
Rayner reportedly highlighted deep discontent among Labour MPs regarding welfare reductions, which include sweeping reforms previously deemed too severe by past Conservative governments during the austerity era.
She is also said to be worried that spending constraints could derail Labour’s plans to boost housebuilding, including social housing.
Justice Secretary Mahmood warned that further budget squeezes could severely impact the Ministry of Justice, which already faces longstanding financial pressures and an overcrowded prison system.
Meanwhile, Cooper raised concerns that further Home Office reductions could jeopardise the government’s ability to ensure safer streets and stronger border controls.
Sources suggest that Starmer allowed the meeting to extend beyond its usual duration due to the intensity of the discussions.
While Foreign Secretary David Lammy acknowledged his colleagues’ concerns, he also backed Reeves’ commitment to fiscal discipline, arguing that past Labour governments had suffered electoral defeats due to excessive spending.
Labour MPs Warn Against Disability Benefit Cuts
No. 10 has been briefing Labour MPs on the need for welfare reforms, with Claire Reynolds, Starmer’s head of MP liaison, presenting data on rising benefit costs.
Ministers are considering tightening eligibility for Personal Independence Payments (PIPs), which have doubled in cost over the past five years.
However, this has sparked significant backlash within the party. Newly elected Labour MP Brian Leishman warned that slashing disability benefits would reflect a “basic lack of humanity,” calling the proposed £6bn cuts “devastating” for the most vulnerable.
A possible compromise could involve strengthening payments for those with severe disabilities who have no prospect of returning to work, according to sources.
Reynolds’ presentation reportedly emphasised that one of Starmer’s core welfare principles is “always protecting people with the most severe disabilities.”
Starmer Holds Firm on Fiscal Rules Despite Party Pressure
Despite mounting pressure from within Labour ranks, Starmer has made it clear that the government’s self-imposed fiscal rules will not be loosened to avoid tough welfare cuts. He has argued that relaxing these restrictions could unsettle financial markets and drive up borrowing costs.
“There’s broad support for the fiscal rules,” a senior government figure stated. “But ministers are struggling with the tough choices required in their own departments.”
As tensions continue to rise, Labour’s leadership faces the challenge of balancing fiscal responsibility with maintaining party unity and delivering on key policy promises.
