Rachel Reeves admits Labour’s freebies bonanza ‘looks a bit odd’ as she tries to cool infighting over winter fuel axe and looming Budget pain with big Labour conference speech vowing there won’t be a return to ‘austerity’

Rachel Reeves admitted Labour’s freebies bonanza ‘looks a bit odd’ today as she tries to quell infighting at conference.

In a round of interviews, the Chancellor defended taking £7,500 worth of clothes from a donor during the election campaign.

But she stressed that she ‘won’t be doing that in government’, after a furious backlash at the host of gifts accepted by senior party figures including Keir Starmer.

Ahead of her keynote speech in Liverpool at lunchtime, Ms Reeves also tried to calm a fresh revolt on the scrapping of the winter fuel allowance. Unions were trying to force a showdown vote of delegates today, but the leadership has managed to delay it – likely until Wednesday, after Sir Keir departs for a UN meeting in the US.

Ms Reeves insisted that there will be no U-turn on the controversial policy, but struck an emollient tone arguing ‘these were not changes that I expected to make or wanted to make’.

The Chancellor also played down fears of deep spending cuts to fill her claimed £22billion ‘black hole’ in the government finances, saying there would be no return to ‘austerity’.   

Touring broadcast studios, Ms Reeves confirmed she accepted £7,500 of clothing donations from friend Juliet Rosenfeld.

She told Times Radio: ‘Juliet and me have been friends for a long time, and she said to me about a year-and-a-half ago ‘I want to help you in the election campaign and the thing I’d really like to do is make sure that for big events and for the campaign trail, you’re smart and well turned out’.

‘I really appreciated that, she’s made a big difference to me. That’s not something that I’m going to do in government.’

She added: ‘I can understand that to a lot of people it looks a bit odd. I get that.’

Ms Reeves told Times Radio that ‘the really important thing is that we’re always transparent’.

‘These are not things we’re going to do in government, but everything was declared,’ she said.

Asked whether tickets to pop concerts and football matches would still be accepted, she said: ‘As long as things are declared properly, so people can see if there’s any conflict of interest, I think it’s fine to go to the football and to go to a pop concert. I don’t begrudge people doing that.’

On the prospect of cuts to public services, Ms Reeves insisted ‘there will be growth in public spending’.

‘There’s not going to be austerity under Labour,’ she said.

‘Not only did it do huge damage to our public services, but it also did huge damage to our economy, because it choked off the investment that is needed to grow the economy.

‘Now, the commitment that I will make for this Budget is that it will be about protecting living standards, fixing the National Health Service, and then, crucially, about rebuilding Britain.

‘Because we can’t keep cutting investment spending, which is what the previous Conservative government did, and that chokes off the private investment that is necessary to grow our economy.

‘We need that infrastructure, the housing, the energy infrastructure, the digital infrastructure, the research labs.

‘I want them here in Britain, there’s a global race on for some of the jobs and industries of the future, whether it’s in life sciences, low carbon energy or tech.’

A Labour source said the leadership was ‘likely’ to lose the vote on winter fuel allowance but insisted that Ms Reeves would not back down.

‘We’ll note it and move on,’ the source said. ‘It’s time for people to start understanding these tough choices are real.’

In her speech, the Chancellor will try to strike a more upbeat note, saying her ‘optimism for Britain burns as bright as it ever has done’.

But she will warn the country faces ‘ruin’ unless the new government first moves to shore up the public finances.

‘I can see the prize on offer, if we make the right choices now,’ she will say. ‘And stability is the crucial foundation on which all our ambitions will be built.

‘The essential precondition for business to invest with confidence and families to plan for the future. The mini-budget showed us that any plan for growth without stability only leads to ruin.’

In a sop to critics on the Left, the Chancellor will say: ‘There will be no return to austerity.

‘Conservative austerity was a destructive choice for our public services – and for investment and growth too.’

She has also pledged to target tax dodgers. According to the Mirror, Reeves will hire 200 experts to catch those trying to escape paying their fair share.

And hinting that spending will rise in the future, she will say: ‘Stability, paired with reform, will forge the conditions for business to invest and consumers to spend with confidence. Growth is the challenge. And investment is the solution.’

But union leaders last night urged Labour to use its massive majority to turn the spending taps on immediately – starting with the reversal of the cuts to the winter fuel payment.

The Chancellor’s decision to means-test the annual payment, which is worth up to £300, will see 10million pensioners lose out. 

Official figures show that 86 per cent of pensioners living in absolute poverty will lose the payment.

Unite union boss Sharon Graham said the ‘cruel’ plan was a ‘misstep’ and should be ‘reversed’. 

She warned ministers not to ignore the results of the conference vote. ‘If they choose to ignore what people are saying outside, where this is a massively hot topic – I am getting inundated with emails – then I think they will pay the price at the ballot box.

‘A Labour government has come in to make change and the first thing they do is pick the pockets of pensioners. I think there’s a problem with that.’

She added: ‘Dying in an early ditch for policies most people hate is not only silly politics, but it can also set the public mood.

‘This is particularly so, when the decision you are defending delivers so little towards whatever plan you have and is instead seen as punitive. Targeting everyday people without much money is cruel, not tough.’