Rachel Reeves has hit back against her critics in Labour in a passionate defence of her economic policy as she fends off a cabinet backlash over her spending review.
Labour heavyweights, including Deputy Prime Minister Angela Rayner and Home Secretary Yvette Cooper have been holding out on agreeing spending settlements with the Treasury, accusing the chancellor of trying to impose “austerity 2.0” and cuts to public services.
Among the issues being fought over are funding for local government finances, social housing budgets, border control, and policing.
But in an exclusive article for The Independent about the announcement on extending free school meals to 500,000 more of the poorest pupils, Ms Reeves underlined her record of trying to rebalance the economy in favour of the less well off.
The chancellor has leaned on her own childhood experience growing up in Lewisham during the Margaret Thatcher years, where she recalls school lessons in prefab huts, which she said sparked a “sense of injustice”.
Ms Reeves has previously spoken of the “tough choices” she has been forced to make because of the inheritance she had from the Tories. But she emphasised in her piece how she has found money for free school meals and – at a time when she is under fire for making £5bn in disability benefit cuts – and had also found the cash for above-inflation increases to universal credit from 2026.
She said: “These are our choices. They are Labour’s choices. And they are the right choices. It is about breaking down barriers to opportunity, driving better behaviour, attainment and wellbeing in our schools. It’s about putting more money – nearly £500 a year – back into the pockets of working parents every year. And it is about helping those who need it the most, so every child has the best start in life.”
The chancellor has often been accused of being cold and out of touch by her critics, with complaints over some of the choices she has made since coming to office. She is currently looking for the estimated £5bn needed to reverse her cuts to winter fuel payments for millions of pensioners and end the two-child benefit cap.
The toughest fight she is facing is with Ms Rayner’s Ministry of Housing, Communities and Local Government (MHCLG) where the deputy prime minister is fiercely resisting the tightening of funds for councils and cuts to the housing budget.
But Ms Reeves has looked to her own background as the daughter of primary school teachers in south east London to explain her own philosophy as she approaches her announcement next week.
She said: “Like most people, my politics were shaped by my upbringing. I grew up in the 1980s and 1990s under Margaret Thatcher and John Major’s governments. I saw firsthand the impact of underinvestment in our country’s state schools.
“My sixth form was housed in a couple of prefab huts in the playground. The library, meant to be a sanctuary of learning, was turned into a classroom simply because there were more students than space.
“I felt then, as I do now, that successive Conservative governments did not care about schools like mine, communities like mine, or the kids I grew up with.
She went on: “That sense of injustice is why I joined the Labour Party. I wanted to do something about it. I want to tackle some of the burning injustices within our society. I wanted to give every child, whatever their backgrounds, the same opportunities to thrive.
“It is the same motivation that drives me today as chancellor of the Exchequer.”
She highlighted how she had brought in leftwing policies to close the gap between the wealthy and ordinary people in the UK.
“I ended the tax loophole which exempts private schools from VAT and business rates so we could put more money into our state schools,” she said.
“I put the money aside to begin rolling out free breakfast clubs in every primary school to put more pounds in parents’ pockets and to give children the best start in life. And it is why we have announced today that from next year we are giving every child with a parent in receipt of Universal Credit free school meals.”
She added: “Britain’s renewal is about people. It is about the next generation. By investing in our children, we are investing in the future of our country, making sure that every young person can fulfil their potential, and that Britain can thrive. This is the promise of change. This is the promise we are delivering.”
The intervention comes as Ms Reeves and her team in the Treasury brace themselves for criticism over expected cuts in her spending review, which sets out government finances for the coming years, next week.
Already, senior Labour figures have privately attacked her for sticking to her election manifesto pledges not to raise income tax, VAT or employee contributions to national insurance.
One senior source said this would mean “there will be a lot of cuts” and the party will be forced “to ditch many of its manifesto spending pledges.”
Several Labour MPs backed by trade unions are now openly pushing for so-called wealth taxes, with a leaked memo revealing that Ms Rayner had led the charge.
The deputy prime minister called for eight wealth taxes in what is seen as “a progressive alternative” to Ms Reeves’ “austerity”.
This included increasing dividend tax rates for higher earners and targeting property traders who use corporate structures to avoid stamp duty.
