Rachel Reeves has warned Labour MPs she’s ready for a fresh ʙᴀттʟᴇ over welfare reforms despite the Government’s humiliating climbdown earlier this year.

The 𝘊𝘩𝘢𝘯𝘤𝘦𝘭𝘭𝘰𝘳 told her party they ‘can’t leave welfare untouched’, adding: ‘We can’t get to the end of this Parliamentary session and I’ve done nothing, basically.’

She said, without changes, that Britain’s benefits bill would continue to soar and leave less money for the NHS and schools, while forcing her to raise taxes even further.

In an interview with Channel 4 News, Ms Reeves also said her ‘discipline’ on spending makes her the right person to be 𝘊𝘩𝘢𝘯𝘤𝘦𝘭𝘭𝘰𝘳.

She suggested this was backed up by the turmoil in financial markets that was seen when she openly wept in the House of Commons in July.

At the time, analysts said the cause of the markets reaction was frenzied speculation about Ms Reeves’ future that had been sparked by the scenes of her upset.

The 𝘊𝘩𝘢𝘯𝘤𝘦𝘭𝘭𝘰𝘳 later said she had been dealing with a ‘personal issue’, but it also came shortly after she and Sir Keir Starmer had been forced to abandon most of their efforts to cut welfare spending.

In the face of a major revolt by Labour MPs, Ms Reeves and the Prime Minister ditched proposed restrictions to Personal Independence Payment – the main disability payment in England – until after a review.

The 𝘊𝘩𝘢𝘯𝘤𝘦𝘭𝘭𝘰𝘳 and Sir Keir were instead left to push through slimmed-down legislation in the Commons.

Rachel Reeves has warned Labour MPs she’s ready for a fresh ʙᴀттʟᴇ over welfare reforms despite the Government’s humiliating climbdown earlier this year

In a TV interview, the 𝘊𝘩𝘢𝘯𝘤𝘦𝘭𝘭𝘰𝘳 also spoke about how she was seen visibly weeping during Prime Minister’s Questions in the Commons at the beginning of July

In the Channel 4 News interview, Ms Reves insisted even those MPs that opposed the Government’s now-abandoned benefits cuts ‘recognise that the welfare system is not working’.

‘It’s not doing enough to protect the most vulnerable, it’s not enough to help people that want to work into work, it’s clearly not working for taxpayers either,’ she said.

‘But you know we’ve now committed to doing reform in a different way, but we can’t leave welfare untouched.

‘We can’t get to the end of this Parliamentary session and I’ve done nothing, basically.

‘Because if more and more of our money that we spend as a government is spent on welfare, you’ve got less for the NHS, you’ve got less on schools and you have to put more on people’s taxes.

‘I’m not prepared to do that and Labour MPs don’t want to do either. But we have to do reform in the right way and take people with us.’

Ms Reeves also spoke about how she was seen visibly weeping during Prime Minister’s Questions in the Commons at the beginning of July.

Asked if she felt ‘vindicated’ by the market response at the time, she said: ‘I’ve always felt that at 12 o’clock on a Wednesday, my job is to sit next to the Prime Minister during PMQs.

‘That was not a good day. People saw that. Other people have bad days at work. They’re not on national television when it happens. They might go and find a quiet spot to be upset.’

Analysts suggested that the negative market reaction to Ms Reeves weeping reflected concerns that, if she left her job, then control over the Government’s finances would weaken.

Asked if the episode had helped her win the argument on fiscal discipline, she replied: ‘I think increasingly people recognise the difficult job that I have as 𝘊𝘩𝘢𝘯𝘤𝘦𝘭𝘭𝘰𝘳.

‘And that you can’t just keep making more demands because you’ve got to make sure that the money is there to pay for things.

‘And, you know, the market said very clearly that they want that discipline in economic and fiscal policy making.

‘I offer that discipline, and I think my colleagues – and actually the country – saw the pressure that we are under to make sure the numbers do add up because it is the right thing to do by our country.’