The Chancellor was visibly tearful in the Commons, as her position came under intense scrutiny after the welfare U-turn which put an almost £5 billion black hole in her plans.
But allies said she was dealing with a “personal matter” and No 10 said she had Sir Keir’s “full backing”.
Sir Keir, who stumbled on his way out of Downing Street for Prime Minister’s Questions, faced questions over his handling of a welfare reform package which has been stripped of key elements to limit the scale of a Labour revolt.
Tory leader Kemi Badenoch said Ms Reeves looked “absolutely miserable” and challenged the Prime Minister to say whether she would keep her job until the next election.
Sir Keir dodged the question about whether Ms Reeves would be in place for the remainder of the Parliament, laughing as he said Mrs Badenoch “certainly won’t”.
Changes to restrict eligibility for the personal independence payment (Pip) were abandoned on Tuesday just 90 minutes before MPs voted on them, wiping out the savings that Ms Reeves had counted on to help meet her goal of funding day-to-day spending through tax receipts rather than borrowing.
Mrs Badenoch said: “Today the Prime Minister refused to back his Chancellor, leaving her humiliated.
“She is the human shield for his expensive U-turns. How can anyone be a chancellor for a man who doesn’t know what he believes and who changes his mind every other minute?”
As the Chancellor left the Commons after Prime Minister’s Questions her sister, Ellie Reeves, took her hand in an apparent show of support.
Asked about her tears, a spokesman for the Chancellor said: “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.”
Reports suggested Ms Reeves had been involved in an altercation with Commons Speaker Sir Lindsay Hoyle shortly before Prime Minister’s Questions.
A spokeswoman for the Speaker said: “No comment.”
Asked why Sir Keir did not confirm in the Commons that he still had faith in Ms Reeves, the Prime Minister’s press secretary told reporters: “He has done so repeatedly.
“The Chancellor is going nowhere. She has the Prime Minister’s full backing.
“He has said it plenty of times, he doesn’t need to repeat it every time the Leader of the Opposition speculates about Labour politicians.”
This is awful to watch, it really is. Rachel Reeves isn’t only crying, she sobbing. If I were Kemi Badenoch or Mel Stride, I’d go up to her afterwards and be human. #PMQs pic.twitter.com/Ga5cHQo8EL
— Adrian Hilton (@Adrian_Hilton) July 2, 2025
Asked whether the Prime Minister still had confidence in Work and Pensions Secretary Liz Kendall, the press secretary said: “Yes.”
Labour has promised that income tax, employee national insurance contributions and VAT will not be increased, restricting Ms Reeves’ options for raising money if she does look to hike taxes.
The Institute for Fiscal Studies’ incoming director, Helen Miller, said: “Since departmental spending plans are now effectively locked in, and the Government has already had to row back on planned cuts to pensioner benefits and working-age benefits, tax rises would look increasingly likely.
“This will doubtless intensify the speculation over the summer about which taxes may rise and by how much.”
Sir Keir declined to rule out tax rises later this year, telling MPs: “No prime minister or chancellor ever stands at the despatch box and writes budgets in the future.”
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Disability groups have shared their concerns
While the vote passed last night, many disability charities remain unhappy with the way the issue was handled, despite some concessions.
James Watson-O’Neill, Chief Executive of the national disability charity Sense, said: “Today’s vote in Parliament is deeply distressing. By choosing to advance this bill, MPs have voted for measures the government’s data say will push 150,000 disabled people into poverty. This is not the right way to reform our welfare system — it’s a move that has already caused significant fear and anxiety within the disabled people’s community.
“We’re incredibly grateful to all those who spoke out against the bill. Their efforts helped secure important government concessions, which mean some disabled people will retain the support they rely on. However, this creates a deeply unfair two-tier system — protecting some while leaving new claimants facing serious financial hardship. And the government’s latest concession, to delay the tightening of the criteria for PIP, doesn’t change the fact that it will eventually become harder for new claimants to access this vital benefit.
“Looking ahead, we urge the government to immediately reconsider their proposal to remove the health element of Universal Credit from young people until they turn 22. We also want to work constructively with them to expand the eligibility criteria for additional support for those who will never be able to work, to ensure no one is left behind.”
PIP IS NOT AN OUT-OF-WORKBENEFITPIP is an allowance that helps disabled people with the extra costs incurred by having a disability. You can claim it whether you work or not.The media and government narrative about PIP is incorrect and must be challengedKILL THE BILL!… pic.twitter.com/oOulXW1CWm
— Atlanta 🦹🏻♀️ #DisabilityRebellion (@areyoflight) June 30, 2025
But Mark Rowland, Chief Executive of the Mental Health Foundation, shared these concerns: “Tonight’s concessions by the UK government are a victory for not just the millions of people across the country who are disabled, but for every single one of us who may find ourselves disabled one day.
“Removing Clause 5 is clearly the right decision given the lack of evidence these measures would encourage anyone with a mental health problem to return to work, and the very clear risk of pushing people into poverty, worsening their mental health. Despite this, this bill remains deeply flawed.
“We remain concerned by the measures in this bill which both reduce the amount paid to recipients of the health element of Universal Credit, and limits its eligibility to those over the age of 22. These measures are discriminatory, and will do little to support people back into the workplace. The UK government should drop the implementation of these measures too.”
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