Rachel Reeves was in the hot seat this week as MPs grilled her on welfare cuts, rising taxes, and trade risks. From controversial "pocket money" remarks to defending the Spring Statement’s economic logic, the Chancellor faced pointed questions on whether Labour’s stability narrative is starting to fray. Here's what you missed from a tense Treasury Committee showdown.
Rachel Reeves has found herself at the centre of a storm this week — not just over the Spring Statement’s economic implications, but also the language used to defend it.
Appearing before the Treasury Select Committee on Wednesday, the Chancellor was pressed hard on a range of fronts: from the deteriorating economic outlook to the government’s controversial benefit reforms and its posture toward looming US trade tariffs.
But it was her comments about welfare that drew the sharpest scrutiny.
Reeves stopped short of personally apologising for Treasury Minister Darren Jones’s now-infamous remarks, where he likened benefit cuts to reducing a teenager’s pocket money. The analogy, which drew widespread criticism for its tone-deafness, was initially made by Jones during a media appearance defending welfare changes announced in the Spring Statement. Reeves, who had also used a variation of the comparison in a separate interview, told the Committee that “it’s clearly not the right analogy” — yet resisted calls to issue a direct apology.
Pressed by Committee Chair Dame Meg Hillier, Reeves clarified that while she acknowledged the language was clumsy, she did not believe she had made the same comments. The Chancellor’s refusal to distance herself more forcefully from the analogy has left critics questioning the government’s sensitivity toward those affected by the benefit changes, particularly disabled claimants facing reductions in support.
Beyond rhetoric, the Committee turned its attention to the economic substance of Reeves’s Spring Statement.
The Chancellor defended October’s tax rises — including the hike to employer National Insurance contributions — arguing they were essential to restore fiscal stability. “There are costs for every policy, but also for irresponsibility,” she told MPs, pushing back against claims that businesses and households are being squeezed too tightly under Labour’s economic strategy.
Forecasts from the Office for Budget Responsibility suggest growth will fall to 1% this year, with inflation expected to peak at 3.2%. Reeves acknowledged these risks, particularly in light of expected US tariffs under Donald Trump’s administration, but insisted the government had created “headroom” to absorb shocks.
Still, Conservative MP Harriett Baldwin described the outlook as an “awful April” for many families — a month marked by rising bills, flatlining growth, and an erosion of confidence among consumers and businesses alike.
With Trump’s proposed tariffs expected to land soon, the government’s stance on international trade came under sharp examination.
Reeves struck a cautious tone. While acknowledging that tariffs — even those not directly imposed on the UK — could negatively impact growth and inflation, she argued that Britain must avoid “posturing” and maintain a “clear-headed” approach. She stressed the importance of not derailing a potential economic agreement with the US, citing “rapid dialogue” underway between both countries.
“Growth and inflation could be affected even if the UK is not targeted,” she said, hinting at the wider global economic interdependencies. However, when asked whether she foresaw a threat to the UK’s financial services sector from Trump’s policy shifts, Reeves replied bluntly: “No, I don’t.”
In what appeared to be a deliberate pivot, Reeves also doubled down on the government’s regional growth agenda. She described it as “absolutely crucial” that economic benefits be felt beyond London and pointed to upcoming infrastructure and housing plans as evidence of intent.
Recent increases to the national minimum and living wage were framed as part of this strategy, with Reeves stating that millions — particularly outside the capital — would see their earnings rise. But when challenged about the simultaneous squeeze from higher taxes and cuts to public services, she fell back on a familiar line: stability first, investment second.
Reeves’s committee appearance revealed a Chancellor balancing delicately between economic orthodoxy and political risk. Her arguments for fiscal discipline may find favour with international institutions — and indeed she cited IMF and OECD backing more than once — but the public mood appears less forgiving, especially amid cost-of-living pressures.
With trade threats looming and public scrutiny intensifying, the bigger question remains: will this be remembered as a brave recalibration of economic policy, or the start of a deeper trust erosion in Labour’s stewardship?
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