Sir Keir Starmer 'didn't appreciate' how upset 'fine' Chancellor Rachel Reeves was during PMQs

Sir Keir Starmer said he did not appreciate how upset Chancellor Rachel Reeves was in the Commons, because he was focused on answering Prime Minister’s Questions (PMQs).

The Prime Minister said on Thursday all people could be caught “off guard” by their emotions, but the Chancellor had to deal with it while on camera in Parliament.

He said she was doing an excellent job, would remain in place beyond the next general election, and that they were both absolutely committed to the Chancellor’s “fiscal rules” to maintain discipline over the public finances.

UK Government bonds rallied and the pound steadied on Thursday, after reassurances from the Prime Minister about the Chancellor’s future.

Downing Street had said on Wednesday night that Ms Reeves was “going nowhere”, despite extraordinary scenes in the Commons in which Sir Keir had declined to publicly support his visibly tearful Chancellor.

Reports emerged on Wednesday night that Ms Reeves had spoken of being being “under so much pressure” before taking her seat for a highly-charged Prime Minister’s Questions (PMQs).

Ms Reeves, who sat by the Prime Minister’s side on the front bench, looked distressed and could be seen on camera wiping tears from her face.

The Chancellor’s position has come under intense scrutiny in recent days after a major U-turn on welfare reform and the biggest rebellion of Sir Keir’s premiership put an almost £5 billion dent in Ms Reeves’ economic plans.

Screen grab of Chancellor Rachel Reeves apparently crying during Prime Minister's Questions | PA

Sir Keir told Virgin Radio he had spoken to the Chancellor on Wednesday evening and she was “fine”. He said her tears were as a result of a “purely personal” matter rather than the “ups and downs of this week”.

The Prime Minister said: “I actually personally didn’t appreciate it was happening in the Chamber, because I came in, I’ve got questions being fired at me in PMQs, so I’m constantly up at the despatch box and down.

“I think we just need to be clear, it’s a personal matter, and I’m not going to breach Rachel’s privacy by going into what’s a personal matter for her.”

Sir Keir said “in politics, you’re on show the whole time, there’s no hiding place”. Ms Reeves was a “great colleague, she’s a friend of mine and I’ll be working with her for a very long time to come”.

“But like all human beings, we’re also personal,” Sir Keir said. “There are moments that catch us off guard and if you’re in front of a camera for large periods of your life, unfortunately, that could be caught on camera in a way, if it had been anybody else at work, it would have not really been noticed.”

The Prime Minister had dodged questions during PMQs on Ms Reeves’s future after being challenged by Tory leader Kemi Badenoch over whether Ms Reeves, whom she said looked “absolutely miserable”, would keep her job until the next election.

The scenes sparked an immediate dip in the markets, with the value of the pound and long-term government bonds slumping sharply in the hours afterwards. The pound slid by 1.14 per cent to 1.358 against the US dollar on Wednesday, after Sterling had risen to a fresh three-year high against the American currency a day earlier.

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The currency also fell by 0.8 per cent to 1.155 against the euro, striking its lowest level since April.

The yield on government bonds jumped as investors appeared to be spooked by the scenes in the Commons, with the yield on ten-year gilts rising by 0.17 percentage points to 4.63 per cent.

Allies of Ms Reeves reacted by saying she was dealing with a “personal matter”, while No 10 later said the Chancellor had Sir Keir’s “full backing”.

Chancellor Rachel Reeves was clearly emotional during Prime Minister's Questions in the Commons (Picture: House of Commons/UK Parliament) | PA

Asked about her tears, a spokesman for the Chancellor said: “It’s a personal matter, which, as you would expect, we are not going to get into. The Chancellor will be working out of Downing Street this afternoon.”

Reports suggested Ms Reeves had been involved in an altercation with Commons Speaker Sir Lindsay Hoyle shortly before PMQs. A spokeswoman for the Speaker said: “No comment.”

Asked why Sir Keir did not confirm in the Commons that he still had faith in Ms Reeves, the Prime Minister’s press secretary told reporters: “He has done so repeatedly. The Chancellor is going nowhere. She has the Prime Minister’s full backing. He has said it plenty of times, he doesn’t need to repeat it every time the Leader of the Opposition speculates about Labour politicians.”

Sir Keir, who stumbled on his way out of Downing Street for PMQs, faced questions over his handling of a welfare reform package that has been stripped of key elements to limit the scale of a Labour revolt.

Changes to restrict eligibility for the personal independence payment (Pip) were abandoned on Tuesday just 90 minutes before MPs voted on them, wiping out the savings that Ms Reeves had counted on to help meet her goal of funding day-to-day spending through tax receipts rather than borrowing.

Challenging Sir Keir at PMQs, Mrs Badenoch said Ms Reeves would now be forced to put up taxes “to pay for his incompetence” and asked if she would still be chancellor at the next election.

She told the Prime Minister: “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.” Sir Keir said: “No prime minister or chancellor ever stands at the despatch box and writes budgets in the future.”

The Tory leader responded to say: “Today the Prime Minister refused to back his Chancellor, leaving her humiliated. She is the human shield for his expensive U-turns. How can anyone be a chancellor for a man who doesn’t know what he believes and who changes his mind every other minute?”

In a video posted to X, shadow justice secretary Robert Jenrick declared the Chancellor’s career was now dead after the “embarrassing” welfare U-turn. As the Chancellor left the Commons after PMQs, her sister, Ellie Reeves, took her hand in an apparent show of support.

Stephen Flynn, the SNP’s Westminster leader, said: “Like almost all MPs I don’t know why the Chancellor was upset in the chamber today, but I do hope she is OK and back to her duties this afternoon.

“Seeing another person in distress is always very difficult and we are wishing her well.”

Labour has promised that income tax, employee national insurance contributions and VAT will not be increased, restricting Ms Reeves’ options for raising money if she does look to hike taxes.

First Minister John Swinney described the UK Government’s handling of welfare reforms as “chaotic and shambolic”, as he expressed concern for what the concessions could mean for the Scottish budget.

Speaking during a visit to the Museum of Childhood in Edinburgh yesterday, Mr Swinney said he welcomed the fact the original proposals had been dropped, saying they were “completely and utterly unacceptable”.

Scottish Government ministers are unlikely to pay a financial price for their failings, but they could pay a political one (Picture: Jane Barlow) | PA

He said: “The UK Government has essentially abandoned the heart of their welfare reform proposals, as a result of the chaotic and shambolic handling of the issue by the Labour government.

“The credibility of that Labour government is now severely undermined as a consequence of what has happened.”

Asked what the changes could mean for the Scottish Government, Mr Swinney said the situation would be monitored “carefully” for any potential impact on the devolved budget.

He said: “I’m concerned about the implications of all of that. But it’s clear to me that an agenda of punishing the vulnerable and those with disabilities is a completely unacceptable agenda, and I’m glad the House of Commons recognised that.”

The First Minister also vowed he would not replicate the Pip changes in adult disability payment, which is the equivalent benefit north of the Border. Social Security Scotland is responsible for some welfare payments in Scotland.

The Institute for Fiscal Studies’ incoming director, Helen Miller, said: “Since departmental spending plans are now effectively locked in, and the government has already had to row back on planned cuts to pensioner benefits and working-age benefits, tax rises would look increasingly likely. This will doubtless intensify the speculation over the summer about which taxes may rise and by how much.”

Speaking about the reaction of the markets, Kathleen Brooks, research director at XTB, said: “If yields continue to rise at this pace for the next few days, the PM and Chancellor will have to decide if they want to have a sensible fiscal policy whereby public sector debt is reined in, or whether they want to please the Labour backbenches, who don’t seem worried by rising debt levels and forget that we are in a new era, where bond investors can shun sovereign debt in favour of less risky, less indebted corporate debt.

“This could be the start of another fiscal crisis for the UK.”