Sir Keir Starmer is facing a backlash from senior ministers over cuts to their departments’ spending planned at the Budget.
Concerns about the spending cuts have been raised across different Government departments, the PA news agency understands.
Several senior ministers were reported to have voiced concerns at Tuesday’s Cabinet meeting about Treasury proposals to reduce some departments’ spending by as much as 20%, according to the Times newspaper, and have since followed up with formal letters to the Prime Minister.
Rachel Reeves told ministers during Tuesday’s Cabinet meeting that plans to fill what Labour calls a “£22 billion black hole” in the UK’s finances will be enough only to “keep public services standing still”.
Sir Keir Starmer is understood to be facing a backlash from senior ministers over spending cuts (PA)
The Treasury is said to have identified a far larger £40 billion funding gap which Ms Reeves will seek to plug to protect key departments from real-terms cuts and put the economy on a firmer footing.
It is with the Treasury rather than the Prime Minister that ministers are said to be largely directing their pushback efforts, as Ms Reeves seeks to finalise her first Budget which she will deliver on October 30.
Experts have argued that ministers need to find £20 billion to avoid a squeeze on so-called “unprotected” departments pencilled in by their Tory predecessors, and billions more to prevent a sharp fall in investment spending.
Some of that could come from changing the measure the Government uses to calculate debt, but economists from the Institute for Fiscal Studies have suggested that some tax rises are all but inevitable to prevent cuts to day-to-day spending.
Downing Street has denied that Sir Keir gave the public the wrong impression about the scale of tax rises that would come under Labour.
Asked whether the Prime Minister had misled voters, his press secretary said: “No. So we stand by our commitments in the manifesto, which was fully funded.
“We were honest with the British public, both during the election and since, about the scale of the challenge that we would receive.
“Then, of course, one of the first things the Chancellor did when we came in was do an audit of the books and found a £22 billion black hole that the previous government lied about and covered up.
“So that’s why we have continued to be honest with the British people that there are going to be difficult decisions in this Budget, and that’s because of the mess that the Conservatives left the economy in.”
The Treasury was contacted for comment.