Chancellor ​in tears after Prime Minister fails to back her after welfare reform ‘shambles’

Downing Street has since said the ​Chancellor is “going nowhere” and will remain in the job, despite the Prime Minister declining to give her a public show of support during heated exchanges in the Commons.

Labour passed limited reforms to the benefits system on Tuesday night – after a string of climbdowns in the face of a backbench rebellion from its own MPs.

Just one year into the new government, there are already questions about the future of both Sir Keir Starmer and Rachel Reeves.

Ms Reeves was visibly tearful in the House of Commons over what was described as a “personal issue”, as her position and Government credibility faced scrutiny from MPs.

Her plans to balance the country’s finances – in part by saving £5 billion per year on benefits payments – lay in tatters after the government climbdown. Financial experts now believe that no savings will be made by 2030.

The economy took another hit when Sir Keir failed to back his chancellor – with the value of the pound and gilts dropping noticeably as he spoke.

The pound slid by 1.14% to 1.358 against the US dollar on Wednesday. On Tuesday – Sterling was at a three-year high against the dollar.

Tory leader Kemi Badenoch said the Prime Minister had left Ms Reeves “humiliated” and questioned how anyone could be a chancellor “for a man who doesn’t know what he believes and who changes his mind every other minute”.

Ulster Unionist MP Robin Swann accused the government of having passed “shameful” legislation – and said while the welfare system needs reform, Labour’s current strategy of “taking a red pen through the parts they don’t like just isn’t going to work”.

The South Antrim MP said: “It is incredibly disappointing that after a long and impassioned debate last night this shameful legislation has been passed.

“There is no doubt that the welfare system needs to be reformed. But this means starting with a blank sheet and over this Parliament, building a new system which starts with the principle of no-one being left behind. The Government’s current strategy of taking a red pen through the parts they don’t like just isn’t going to work”.

He accused the government of clumsily amending the legislation on the hoof.

“Part of these amendments was the withdrawal of Clause 5 at Committee stage – which completely ignored Northern Ireland as Clause 6. A result of this would’ve meant that the four-point criteria on PIP would still apply to Northern Ireland but not GB. Once I raised this issue with the Labour Welfare Minister, they were then able to confirm to me that, the Government had decided to now also remove Schedule 2 – 4 of the Bill, which keeps equivalence for Northern Ireland without removing Clause 5.

“With such shambolic amending on the go, I urged the Government to withdraw the Bill.

“Even now that it has been amended, this Bill still does not create a better or fairer welfare system, and I know that many will still be facing great uncertainty and anxiety about what these changes will mean for them. On top of this, after all the political drama and uncertainty they have caused, the Government has not done the cost cutting they set out to do."

Mr Swann backed an amendment to the Universal Credit and Personal Independence Payment Bill which seeks to ensure that people who have health conditions which fluctuate, for example Parkinson’s and MS, are included in the severe conditions criteria for the benefit.