Chancellor Rachel Reeves vows to take ‘iron-fist’ to Whitehall spending and demands Cabinet cut size of state

RACHEL Reeves last night vowed to take an “iron fist” to Whitehall spending — demanding her Cabinet colleagues get real on cutting the size of the state.

The Chancellor pledged to root out waste and inefficiency, with every pound of taxpayers’ cash facing a stringent “value for money” test.

Ministers will be told to find savings of up to five per cent as part of a review of spending up to 2029, with banking chiefs brought in to scrutinise the plans.

Spending not contributing to PM Sir Keir Starmer’s priorities — such as growth or fixing the NHS — will be stopped in its tracks.

Ms Reeves said: “The previous government allowed millions of pounds of taxpayers’ money to go to waste on poor value for money projects.

“We will not tolerate it; I said I would have an iron grip on the public finances and that means taking an iron fist against waste.

“By reforming our public services, we will ensure they are up to scratch for modern day demands, saving money and delivering better services for people across the country.

“We will not tolerate it. I said I would have an iron grip on the public finances and that means taking an iron fist against waste.

“By reforming our public services, we will ensure they are up to scratch for modern-day demands, saving money and delivering better services for people.

“That’s why we will inspect every pound of government spend, so that it goes to the right places and we put an end to all waste.”

The outside experts from banks will examine what spending is seen as necessary.

Academics will also be brought in to study plans.

Departments had been urged to find two per cent savings at the Budget but yesterday senior Cabinet minister Pat McFadden warned that there is “more to come”.

For the Tories, Shadow Treasury Minister Richard Fuller said last night: “Delivering value for money for the taxpayer is a noble goal, but Rachel Reeves’s record so far has been to dole out inflation- busting pay rises to Labour’s union paymasters while mandating nothing in return, and making no reforms to public sector productivity or welfare spending.”

Meanwhile, Ms Reeves told EU finance chiefs that she will not be picking sides between Brussels and US President-elect Donald Trump.

Meanwhile, Ms Reeves told EU finance chiefs that she will not be picking sides between Brussels and US President-elect Donald Trump.

She became the first Chancellor since Brexit to address the group as part of a reset to strengthen ties with the bloc.

During the visit, she said: “The idea that somehow we’re either with America or the EU is completely wrong.”