Rachel Reeves tells Tory critics to ‘get actual’ as she comes out preventing on economic system

Rachel Reeves came out fighting as she vowed to go “further and faster” to get Britain’s economy firing.

The Chancellor shrugged off Tory calls for her resignation as she faced MPs for the first time after a turbulent week, which saw volatility in the pound and the cost of Government borrowing soar. She told Conservative critics to “get real” over the market turmoil and asked if they wanted to apologise for Liz Truss’s mini-Budget.

But her efforts to get on the front foot were derailed by the dramatic resignation of Treasury Minister Tulip Siddiq after she became embroiled in a corruption investigation in Bangladesh. Ms Siddiq said she had become a “distraction” but she hadn’t broken the ministerial code.

In a punchy Commons clash following the Chancellor’s recent trip to China, Shadow Chancellor Mel Stride claimed Ms Reeves was part of a “Shakespearean tragedy”, adding: “To go or not to go, that is now a question”. The Conservatives called on the Chancellor last week to scrap her trip to Beijing and Shanghai, where she held talks on trade and investment that the Treasury claimed would be worth £600 million to the UK over the next five years.

But cheered on by Labour MPs, Ms Reeves dismissed his attacks as “simply not serious” and said his party was out of ideas on how to fix the mess they made of the economy. She said: “You can now see what happens when the leader of the opposition (Kemi Badenoch) tells the shadow cabinet they shouldn’t have any policies.

“As far as I can tell, the Conservative party’s economic strategy is to say that the UK should not engage with the second largest economy in the world (China), or indeed within our nearest neighbours and our biggest trading partners in the European Union.

“His economic strategy is to support higher spending but none of the right decisions that are required to deliver sound public finances. His economic strategy is to ignore the mistakes of the past with no apology to the British people for his part in Liz Truss’s mini budget that crashed the economy.”

She told Conservative MP Luke Evans to “get real” for trying to blame the UK Government for global turmoil in the markets. “I don’t believe it reasonable to suggest that the reason why bond yields in the United States, in Germany and France have risen is because of decisions made by this Government,” she said. “I think he should just get real.”

Ms Reeves said she would not duck the challenges created by global economic uncertainty. She added: “The economic headwinds that we face are a reminder that we should, indeed we must, go further and faster in our plan to kickstart economic growth.”

Senior Labour MP Dame Meg Hillier said the Tories were making out that the “country was going to hell in a handcart”. “Doesn’t she agree with me that there is no time for panic, that it is perfectly possible to manage any pressures on the budget through astute management of public spending,” the Treasury Committee chairwoman said. “And that compared with the years of austerity on the last side, we are a very, very long way from that approach.”

The pound began to stabilise today after hitting fresh 14-month lows on Monday, as government bonds recovered some ground. But the turbulence risks forcing Ms Reeves into some tough choices, with experts warning she could be forced to cut public spending or hike taxes to meet her strict fiscal rules.

The Chancellor refused to rule out making spending cuts after the PM said on Monday that the Treasury needs to be “ruthless” in its approach to public spending. Asked by SNP MP Stephen Flynn to rule out further cuts to stretched public services, she said: “I’m not going to write five years worth of budgets in the first six months of a Labour Government.

“But I am absolutely committed to meeting the fiscal rules that I set out in the budget in October, because we know what happens when governments lose control of the public finances, and that is they crash the economy.

Earlier, former Shadow Chancellor John McDonnell said spending cuts would be “politically suicidal” and could drive more support to Nigel Farage’s right-wing Reform UK. Mr McDonnell warned: “If ruthless means we’re going into a round of cuts, particularly on welfare, I’m really worried.”

Ms Reeves was flanked by her deputy Darren Jones, Deputy PM Angela Rayner, Business Secretary Johnny Reynolds and DWP Secretary Liz Kendall in a show of support after a tricky week. Downing Street said on Monday she would remain in post “for the whole of this Parliament” amid speculation in Westminster about her future. Keir Starmer insisted he had full confidence in her, and said she was doing a “fantastic job”.

However pollster Professor John Curtice warned there was trouble ahead if the Government failed to turn the economy around. He told the Mirror: “The real spectre that’s hanging over this Government is that no government has presided over a market crisis and survived at the ballot box. It’s tipping very dangerously close to the cliff edge.”