Labour has been plunged into chaos over foreign aid, with Chancellor Rachel Reeves facing down a cabinet backlash over a planned £2billion cut.
Frontbenchers have demanded Reeves to announce more money for the aid budget and warning about the damage the cuts will cause.
It is believed Foreign Secretary David Lammy is one of those pushing for the increase.
Despite this, the Chancellor is preparing to let spending on aid fall to 0.5 per cent of gross national income (GNI) after two years when it had been pushed above that level by her Tory predecessor, Jeremy Hunt.
The Cabinet is set to be involved in some infighting over Rachel Reeves’s plans
PA
The Telegraph reports that ministerial tensions on spending cuts demanded by Reeves are much bigger than the supposed No 10 rifts making headlines, with many taking their complaints directly to Darren Jones, the Chief Secretary to the Treasury, this week in face-to-face meetings.
Aid organisations, including the UK arm of the charity run by former Labour MP David Miliband, have warned that Reeves’s plans will see the aid budget fall to a 17-year low and are lobbying ministers over the issue.
Meanwhile, the health and education departments have reportedly been ordered to find savings of at least £1billion each, despite their secretaries of state vowing no return to austerity.
One Whitehall source said: “She is holding an iron grip on spending.”
LATEST DEVELOPMENTS
The Telegraph reports that there has been tension between ministers
PA
Reeves is due to deliver her first Budget on October 30 and used her conference speech last month to warn of “tough decisions”, but rejected a return to austerity.
“Yes, we must deal with the Tory legacy and that means tough decisions, but I won’t let that dim our ambition for Britain,” she said.
“So, it will be a budget with real ambition, a budget to fix the foundations, a budget to deliver the change that we promised, a budget to rebuild Britain.”
Meanwhile, a leading economist has warned from the Chancellor about “tough decisions” ahead of this month’s Budget could “dent” confidence for both businesses and consumers.
Chancellor Rachel Reeves is due to deliver her first budget on October 30
PA
Professor Mairi Spowage, director of the Fraser Of Allander Institute think tank at the University of Strathclyde, said such “rhetoric” has the “potential to dent business and consumer confidence” and could make worse the “softening economic performance” experienced over the summer.
Her comments came as the institute upgraded its forecast for economic growth, saying GDP in Scotland could rise by 0.9 per cent in 2024 – up from the 0.7 per cent it had forecast in June.
She said: “The new Chancellor Rachel Reeves has set out her view of their fiscal inheritance and the difficult decisions which may need to be made in order, as they would see it, to restore economic stability.
“The rhetoric around this has the potential to dent business and consumer confidence and contribute to the softening economic performance over the summer.”