RACHEL Reeves was in tears this afternoon as Sir Keir Starmer refused to guarantee her job amid Labour’s humiliating welfare fiasco.
Tears trickled down the Chancellor’s cheek as she sat beside the PM in the Commons for their weekly clash with Kemi Badenoch.
Rachel Reeves broke down in tears at PMQs today, as Sir Keir Starmer refused to confirm she will remain as Chancellor
As PMQs rumbled on, Ms Reeves was handed chewing gum and her sister, fellow minister Ellie Reeves, reached out to hug her.
A spokesman for the Chancellor later insisted the tears related to “a personal matter”.
They added: “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.”
It has been claimed that the Chancellor had an “altercation” with the Speaker Lindsay Hoyle when she entered the Commons’ chamber.
A Minister told the BBC: “She had an altercation with Lindsay [Hoyle] just before PMQs. They had a row. I think he ended up apologising to her.”
The Speaker’s Office has been contacted for comment.
Hoyle had allegedly spoken to her about using shorter answers during Treasury questions the day before.
However the markets reacted badly to the sight – shown on live TV – with 10-year bond yields rising and the pound falling against the dollar.
In recent days Ms Reeves has taken flak from her own colleagues over the government’s botched handling of their benefits package.
The biggest rebellion of Labour’s term in office so far last night saw 49 MPs oppose their heavily-gutted welfare reforms.
MPs have told The Sun Ms Reeves appeared “in tears” ahead of taking her place in PMQs at noon.
Putting the boot in during the exchanges, Tory leader Ms Badenoch said: “This man has forgotten that his welfare bill was there to plug a blackhole created by the Chancellor.
“Instead they’re creating new ones. She looks absolutely miserable. Labour MPs are going on the record saying the chancellor is toast.
Markets panic as Reeves weeps
By Ryan Sabey, Economics Editor
The markets have been spooked by Rachel Reeves’ tears at Prime Minister’s Questions.
Viewers at home would have been puzzled and MPs looking on in the House of Commons chamber wondered what was going on.
But the confusion in Westminster has led to movement in the City.
The pound dropped by 0.7 per cent while gilt yields jumped in an immediate reaction.
What didn’t help matters was Sir Keir Starmer refusing to guarantee her future in the Treasury when asked twice by Tory leader Kemi Badenoch.
On the fiscal side, the savings that were going to be made from benefits cuts, around £5 billion, are going to have to be plugged somehow.
The Treasury say the matter was “personal” and she will be back at her desk in Downing Street working this afternoon.
The question now is will the City be content with Number 10 saying she is “going nowhere”.
“The reality is she’s a human shield for his incompetence. Will she really be in post for the next election?”
Despite previously saying Ms Reeves would remain in post until the next election, Sir Keir refused to guarantee her job today.
After ducking the question, Ms Badenoch laid in: “How awful for the Chancellor that he couldn’t confirm that she will stay in place.”
Sir Keir’s spokeswoman later insisted the Chancellor was “going nowhere” and the PM did not feel the need to “repeat” those assurances in the Commons.
The emotional scenes came after the government last night abandoned the Personal Independence Payment element of the welfare shake-up putting them on hold until a review is carried out and reports back in the autumn next year.
The eleventh-hour move ripped up key parts of the Bill just 90 minutes before MPs were due to vote as Labour rebels still threatened to torpedo the legislation.
The embarrassing climbdown is the second major U-turn in a week, after Sir Keir’s top team were already forced to water down the Bill in the face of open revolt.
Ministers had planned to overhaul Personal Independence Payment (PIP) rules from November 2026, meaning disabled claimants would need to score at least four points in one activity, such as washing, dressing, or preparing food, to get support.
Currently, people qualify by scoring a total of eight points across multiple tasks, making it easier to access the benefit.
Last week, Labour agreed to limit the crackdown to new claimants only after a backlash from MPs.
But under yesterday’s retreat, the changes were shelved entirely — with no set date for when, or if, they will happen.
Sir Stephen confirmed the reforms will only take place after his full review of the PIP assessment process, due to conclude in autumn 2026.
It leaves Ms Reeves’ economic plans in disarray, as the welfare squeeze was originally designed to save £4.8 billion a year, later slashed to £2.3 billion after the first U-turn.
This morning Chancellor of the Duchy of Lancaster, Pat McFadden, put Brits on notice that the U-turn will have “financial consequences”.
All the Universal Credit and PIP changes YOU need to know
Disability benefits
Any proposed changes to Personal Independence Payments now won’t kick in until after a review has taken place.
The PIP benefits – the main disability welfare payment for those with a disability – is subject to a review by Welfare Minister Sir Stephen Timms.
The benefit payments are in place to help those affected with daily tasks such as mobility.
Payments currently start at £1,500 but rise to £9,600 which are paid out even if someone is still working.
The daily living rate comes in at £73.90 for the lower rate and £110.40 for the higher rate.
Figures show that the mobility rate is worth £29.20 and rises to £77.05 for the higher rate.
Ministers have revealed that 1,000 people per day are claiming PIP – which is the equivalent of the size of Leicester every year.
Following a major rebellion, those who are now claiming PIP be able to claim the same amount of money.
But for new claimants from November 2026, there will be a set of stricter measures set out as the government aims to reduce spending on the benefits and get people back to work.
Review by Sir Stephen Timms to delay PIP changes
Welfare Minister Stephen Timms has told MPs that any changes to PIP eligibility will come in after his review has been published.
The major concession came just 90 minutes before MPs were due to vote. The Timms review is due to report in autumn 2026.
His four-point eligibility criteria has been dropped entirely from the legislation.
Now, disability groups will work with Timms on his review.
Universal Credit
More than three million recipients of Universal Credit don’t have to find work due to their poor health.
A single person who is aged 25 or over can receive the basic level of UC which comes in at £400.14 every month.
But that can rise by a further £422.37 due to the incapacity top-up due to a disability or long-term condition – more than doubling the original payment.
The new plans mean that anyone up to the age of 22 will not be able to claim.
Existing claimants will get £97 per week until the end of the decade. But new claimants will only receive £50 a week in the next financial year.
Ministers had tried to freeze the payment for the next four years but a commitment has been made for it to go up with inflation.
Employment support package
Welfare Secretary Liz Kendall will spend an extra £300 million on employment support she insists is the biggest disability employment support package for a generation.
The cash will be spent on trying to get those claiming sickness benefits back into work. A total of £1 billion will be spent in 2028/29.
Economists have already declared that the expected £5 billion of savings expected from the welfare overhaul will now save nothing.
Mr McFadden told Times Radio: “This is a decision that will have financial consequences. The process of the last couple of weeks does have financial consequences.
“They will all be taken together with all the other moving parts that there are in the economy, in the fiscal picture at the Budget, and that will be set out at the time.
“But I’m not denying that when you set out on a plan that has a cost attached to it, and then you have to change that or take it forward in slower time, that is a decision with financial consequences.”
The Cabinet Minister insisted that the government would stick to its manifesto pledges of not hiking income tax, national insurance or VAT.
Sir Keir humiliated by rebellion
By JACK ELSOM, Political Editor
LIKE a fishmonger with a fresh kipper, the Prime Minister last night slapped his flagship welfare package on the table, reached for a sharp knife and filleted its guts.
He then took the disemboweled vessel and presented it on a platter for rebellious Labour MPs who licked their lips – for it is they who are now in charge.
The slow-motion car crash over Labour’s flagship benefits reforms has been nothing short of a disaster.
In isolation it is bad enough the PM will be too terrified to ever again touch the issue – one of the most critical in British politics, if the country is to be turned around – for fear of rousing mutiny.
But the whole sorry saga has laid bare a deeper dysfunction within Starmer’s premiership that threatens to drive his administration into the deep freeze.
The omnishambles that has played out in recent weeks is worth recapping in full.
After their original plans to squeeze benefits were leaked earlier this year, ministers watered down the scale of their ambitions to a paltry £5billion in savings.
Despite barely scratching the surface of the ballooning handouts bill, the language from Downing Street was that getting people off handouts was a “moral” mission.
It was a mission that did not survive contact with an ambush from 120 of their own MPs, who pledged to back a wrecking amendment sinking Starmer’s flagship reforms.
What followed from No10 was a mix of persuasion, scare tactics, angry phone calls and arm-twisting before the inevitable: Keir caved.
By bending to the revolt, the PM not only slashed the projected savings, but appeared as robust as a Mr Whippy in the current heatwave.
His claim to have been distracted by global events also did little to win favour with a public who rightly expect their leaders to multi-task.
Humiliated and bruised, at least Downing Street had appeased their disgruntled MPs to the point they would hold their noses and let the Bill pass.
Or so they thought.
Naive Welfare Secretary Liz Kendall’s statement on Monday detailing the weakened package only made things worse.
By hastily redrawing the plans to appease the rebellion, she had, those same rebels bleated, created a “three-tier system” for benefit claimants while still pushing 150,000 into poverty.
Still high from their initial victory, some blood-scenting MPs refused to fall into line and instead had a crack at extracting further concessions to buy their support.
Cue another disastrous run out from Kendall, who yesterday paraded the remaining scraps of the government’s welfare package ahead of last night’s vote.
But it only took another public pasting from her own MPs and the government blinked again.
In the hours before last night’s crunch vote, the Bill was being watered down even further.
It was left to Kendall’s deputy Stephen Timms to deliver the coup-de-grace from the dispatch box: the central plans to tighten the criteria for disability handouts would be dumped entirely.
Mutilated out of all recognition from its original form, is it any surprise MPs were last night urging ministers to put the Bill out of its misery altogether?
As one Cabinet Minister told me last night: “It hasn’t been our finest hour”. You can say that again…
How has Starmer found himself in such an invidious position just a year into his premiership?
MPs are grumbling about his all-powerful chief of staff Morgan McSweeney for being too combative and sidelining the parliamentary party.
Suggestions the No10 Svengali – credited with banishing the Loony Left and turning Labour into an election-winning machine – would be sent packing were yesterday firmly shut down by Starmer himself.
While admitting “frustrations” with the handling of recent days, an ally told me last night that “we simply wouldn’t be here without Morgan” – a sentiment still shared by many.
Backbenchers grumble that the famously unclubbable PM has failed to press the flesh with them in Westminster’s tea rooms and bars.
After making four u-turns in the last few weeks alone, there is a growing sense that Starmer is not in control.
At Cabinet yesterday morning he tried to gee up his top team by rattling off their list of achievements one year into the job.
Reasons to be cheerful were: “A cut in NHS waiting lists, investment in transport, major infrastructure decisions, funding for social and affordable housing, extending free school meals and introducing free breakfast clubs.”
In other words, they have been very good at spending money which is now drying up.
The retreat on welfare savings means Chancellor Rachel Reeves has even less wriggle room at her Autumn Budget.
Worshipping at the altar of the Office for Budget Responsibility means that – despite presiding over an economy worth £3trillion – the extra cost of welfare and winter fuel u-turns has left her scrambling to find another £5billion or so.
Ministers last night could not even say how much their newly-enfeebled package would save.
But if aides around Starmer think that Things Can Only Get Better, they will face a whole new world of political pain if they come back for more tax rises.
Already speculation is swirling that the Chancellor is eyeing a hike in Fuel Duty, a move that would unforgivably betray millions of drivers at a time of volatile oil markets.
She is also considering going back on a promise made just months ago to end the freeze on income tax thresholds.
Asked yesterday if she was still committed to scrapping these stealth taxes, she ducked and weaved.
One year in office and Sir Keir has had the worst anniversary present possible: a duffing up by many in his own party and unceremonious humiliation.
He now needs to get an urgent grip – or it certainly won’t be the last time he gets done up like a kipper.
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