(Bloomberg) -- Chancellor Rachel Reeves said she’s reached agreement with all of her UK cabinet colleagues on their spending allocations for next week’s budget, following tensions with some senior ministers over cuts planned for their departments.
In a BBC interview, Reeves referred to a Treasury tradition whereby balloons representing each government department were inflated and stuck to the wall of the office of her deputy, Chief Secretary to the Treasury Darren Jones, ahead of budget talks, before being popped when settlements were reached. “All you need to know,” Reeves told BBC Radio 5 Live, “is there are no balloons left in the chief secretary’s office.”
The revelation comes after a tricky period for cabinet relations during which multiple ministers went over the chancellor’s head to write directly to Prime Minister Keir Starmer to protest cuts to their areas, as first revealed by Bloomberg last week. Angela Rayner, the deputy prime minister and housing secretary, did not reach agreement with the Treasury on spending for her department until late on Friday night, two days past the alloted deadline.
“I’m very sympathetic towards the mess that my colleagues have inherited”, Reeves said, referring to the £22 billion ($29 billion) fiscal black hole she says the previous Conservative administration left behind. “But any additional money, in the end, it has to be paid for either by taking money from other departments or raising taxes.”
Addressing reports of cabinet dissent, Reeves said it was “perfectly reasonable that cabinet colleagues set out their case — both to me as chancellor and to the prime minister, about the scale of the challenges that they find in their departments.” She described the past week as “a really constructive process.”
As she prepares to deliver Labour’s first budget in 14 years, Reeves is planning a mix of tax rises and short-term spending restraint as part of a push to raise as much as £40 billion to plug the budgetary void and fund her party’s priorities — including the National Health service and longer-term infrastructure projects.
Reeves said she remained committed to election promises not to raise income tax, national insurance and value added tax for working people, but added “we do need to look at other taxes to make sure that the sums add up.”
“We do need to find additional money,” Reeves said. “There will be more difficult decisions to come on spending on welfare and taxation, and I’m not going to pretend otherwise.”
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