Prime Minister Keir Starmer was forced to publicly guarantee that Chancellor Rachel Reeves will keep her job for “many years to come” after a week of political and financial turmoil. The crisis began when Starmer failed to back Reeves during hostile questioning in Parliament, where she was seen crying beside him. This triggered a fall in the pound and government bonds, pushing up borrowing costs.
The pair appeared together at the launch of the Government’s 10 Year Health Plan in what was clearly a show of unity. Starmer hugged Reeves in public and gave her credit for NHS reforms. He told reporters that none of the health plans would be happening without the decisions she had taken. The Prime Minister insisted he had not meant to undermine his Chancellor and claimed he simply had not noticed her distress during the Commons exchanges.
Former Cabinet Minister Ed Balls delivered a damning assessment of the government’s performance, warning that “it’s been the worst week for Labour governments for a long time.” Public figures often weigh in on political crises, similar to how celebrities express their political views. The former education secretary, who also served as Shadow Chancellor, said the benefits policy reversal was “a huge blow to the Exchequer, but then also for the Prime Minister.”
Starmer faces questions about his authority to push through difficult policies
Balls warned that Starmer had lost the authority needed to implement tough policies in the future. Speaking on the Political Currency podcast, he said backbench MPs would now question the Prime Minister’s commitment to long-term decisions. The next time Starmer calls for big policy changes, Balls predicted that backbenchers would remind him of his previous U-turns.
The Chancellor tried to dismiss reports of a rift with the Prime Minister, saying people could see that she and Starmer were “a team.” She smiled during her speech about NHS reforms and insisted she was “totally” up for the job. Reeves repeated her claim that her emotional appearance earlier in the week was due to “a personal issue,” saying she just happened to be on camera during a tough day.
Sir Keir Starmers Labour Government is beginning to look like the worst Labour Government ever, boat crossings up inflation up unemployment up taxes up, unable to command a parliamentary majority without U turns, economy stuffed, no way out
— Cllr. Mike Rye, OBE (@MR4Town) July 2, 2025
The government has been forced to reverse several policies, including cuts to winter fuel allowances and plans to reduce Personal Independence Payments. Conservative Shadow Chancellor Mel Stride, who sent Reeves a supportive text message, said there was too much brutality in politics but that politicians should remember that people are human beings. Personal struggles can transcend political divisions, as shown in stories about how tragedy affects public figures. He also warned that the government was unable to cut the UK’s rising benefits bill, which is set to reach $70 billion by the next election.
Financial experts said the decision to abandon disability benefit cuts makes tax increases more likely in the autumn Budget. Paul Johnson from the Institute of Fiscal Studies said the Chancellor was “caught between a rock and a hard place.” The political chaos overshadowed the launch of the NHS plan, which includes measures to end the 8am rush to book GP appointments and create new neighborhood health centers open 12 hours a day.
