Some of the most awkward moments during my time working in Westminster came during the tense negotiations between Secretaries of State and senior Treasury ministers ahead of major fiscal events.
I was sat by the side of then-Chief Secretary to the Treasury as a parade of departmental heads traipsed into his Parliamentary office to hammer out the financial expectations and requirements of their respective departments ahead of a Spending Review. Senior ministers, who were usually cordial with one another, suddenly found themselves scrapping for every penny as they sought to achieve the objectives of their department, set by Number 10.
Although I witnessed this under a Conservative government, we are seeing something similar play out ahead of Labour’s first Budget on 30th October.
Reports of letters to the PM about the scale of cuts and signed by senior ministers – including Angela Rayner and Louise Haigh – indicate deepening unease with the Treasury’s proposed plan of action. Many feel the proposed spending reductions across several departmental budgets risks undermining Labour’s flagship promise: a ‘national renewal’ on par with post-war Britain.
These ministers argue that infrastructure investment and public service restoration require stable, not diminished, funding, stressing that the public will judge Labour’s success and failure on this very promise.
In previous years, I witnessed seasoned ministers walk out of similar meetings exasperated. This time, the stakes feel even higher as Number 10 and the Treasury will be looking at the Budget as a means of resetting a bumpy start to life in power. Labour’s inner circle has stressed the need for ‘difficult choices,’ but an uneasy narrative has already emerged as Cabinet ministers align against the Chancellor’s cost-saving measures.
These fiscal events carry a dizzying web of audiences, often with conflicting interests. Voters, markets, business, the media, MPs – but most importantly, cabinet ministers who have to work within the constraints set by their Treasury overlords.
Do these tensions signal trouble ahead for Starmer? If nothing else, they reveal fundamental divides in priorities within the Cabinet. Senior ministers, loyal to Labour’s campaign pledges, fear the Treasury’s cuts could dilute the vision that brought Labour to power. The Chancellor insists that prudent financial management is the cornerstone of Labour’s economic credibility. To her credit, that has always been Reeves’ position, even during campaigning, and her discipline deserves admiration, but ministers argue that without substantial investment, Labour’s ambitions for public services and infrastructure may falter.
Which audience walks away most pleased with Reeves’ Budget on Wednesday will perhaps indicate where Labour’s true priorities lie.