Rachel Reeves tells Labour child benefit rebels: We won’t back down

‘Sad truth’ is Labour can’t afford to reverse lots of Tory policies, says shadow chancellor

Keir Starmer and Labour’s shadow chancellor Rachel Reeves (PA)

Rachel Reeves has fired back at Labour MPs sharing their anger over the plan to uphold the Tories’ “nasty” two-child benefit cap.

Labour’s shadow chancellor said “dire” public finances meant there is not enough money to ditch the cap, despite fury from both the left and normally supportive backbenchers.

In a grim message for idealists, Ms Reeves told BBC Radio 4’s Today programme that the “sad truth” is that there were lots of Tory policies a Labour government would not reverse.

Sir Keir Starmer defended making “tough decisions” during an interview with Tony Blair on Tuesday night – mentioning six other policies Labour government could not afford.

Asked about his remarks, Ms Reeves told the programme: “There are more than six things that an incoming Labour government won’t be able to do.”

The shadow chancellor said: “We are going to have the most dire economic inheritance of any incoming government. The level of debt in the UK economy is the same size of everything we produce in the economy on an annual basis.”

She added: “I’ve lost count of the number of times I’ve gone through the division lobbies and vote against what the government have done. Does that mean we’re going to be able to reverse all of those things? The sad truth is we’re not going to be able to do that because of the dire economic inheritance.”

Ms Reeves refused to say if Labour would scrap the bedroom tax. “We’ll set out all of our plans around benefits and taxation and other spending closer to the general election.”

She added: “It is our duty to get control of the public finances and ensure we’ve got a stable economy. It’s not a nice-to-have. It is the rock of stability upon which all our policies are built. There will be nothing in a Labour manifesto that is not fully costed.”

Keir Starmer says he has to be ‘ruthless’ (PA Wire)

Asked about the controversy in a conversation with Sir Tony at the Future of Britain conference, Sir Keir insisted that Labour had to be “ruthless” and take “tough decisions”.

The Labour leader said: “In the abstract everyone says, ‘That’s right Keir.’ But then we make tough decisions – and we’ve been stuck in one for the last few days – and they say ‘We don’t like that. Can’t we make another one?’”

The phrase ‘Sir Kid Starver’ has been trending on Twitter, while Scottish Labour leader Anas Sarwar and MPs from different wings have spoken out against the “terrible” decision.

The row is set to explode again at Labour’s National Policy Forum meeting this weekend, where party figures will meet in Nottingham to form a programme ahead of next year’s general election.

But a former Bank of England economist Tony Yates said Labour’s claim that there was “no money left” was “false”. And Jonathan Portes, professor of economics King’s College London, told The Independent that the claim was “laughable”.

Asked what the point of a Labour government Ms Reeves told Today her party would expand the windfall tax, scrap non-dom tax status and free breakfast clubs in all primary schools. “My over ambition is to grow the economy … to get the money we desperately need.”

Meanwhile, commenting on the better-than-expected inflation figures, Ms Reeves said hard-pressed families prices are “still going up at staggering rates and that they’re bearing the brunt of those costs”.

She said Britain’s inflation being higher than international peers was a “hallmark of Tory economic failure”, adding: “There may be global shocks – but Britain is so exposed to those because of Tory economic failure that has led to a severe lack of security in our economy.”

Ms Reeves told the BBC that Labour would do three things to bring down inflation, including securing more of Britain’s on energy supplies and helping more Britons back into the labour market.

She said Labour would also “fix” the Brexit deal – saying the current agreement “with extra checks and bureaucracy” was causing persistent food price inflation. “We need to improve that deal to improve the flow of goods and services.”