Healey showdown raises fresh questions over Starmer-Reeves power dynamic

One of the most scathing accusations made by John Healey in his resignation letter on Thursday was that the prime minister lacks the authority to stand up to his chancellor.

“You have been unable, and the Treasury has been unwilling, to commit the resources that the nation needs to defend the country at this time of rising threats,” the former defence secretary wrote.

It is a criticism that has been levelled at Keir Starmer before; that without a political vision of his own, he is too easily swayed by the demands of Rachel Reeves.

But for allies of the prime minister, the irony is that on this occasion, Starmer was braced for a fight with Reeves, not Healey.

“We went into Thursday thinking we were set for a showdown with the Treasury, not the MoD [Ministry of Defence],” said one. Another added: “The prime minister had pushed the chancellor into giving way more than she wanted, so we thought that was where the problems would lie.”

The relationship between the two people at the centre of government has been one of the driving forces behind Labour’s march to power and much of what has happened in the two years since.

Starmer and Reeves are almost never publicly at odds, often choosing to make controversial announcements jointly. When the party decided in opposition to scale back its green ambitions, for example, the party leader and shadow chancellor appeared together to brief reporters on the details.

Friends say the two are similar in views and temperament – steady, managerial politicians who may lack the charisma of some colleagues but pride themselves on remaining calm in the face of turbulence.

Reeves is the only cabinet minister who Starmer has guaranteed will remain in post until the election, even when her tearful Commons appearance triggered questions about her future.

At times, however, their closeness – and Starmer’s distaste for settling ministerial disputes – has prompted questions over who is really driving the government’s agenda.

For instance, allies of the prime minister say he was informed relatively late about the chancellor’s decision to cut winter fuel payments, and did not think to challenge her judgment.

And when cabinet ministers wrote to Starmer asking him to overrule Treasury demands for departmental cuts, he appeared to give them short shrift. “Not every department will be able to do everything they want to,” Downing Street said at the time.

At one point, No 10 insiders worried they lacked the economic expertise to stand up to the Treasury. In response, the prime minister hired Minouche Shafik, the former president of the London School of Economics, as his chief economic adviser.

In recent weeks, however, according to government sources, the relationship between Starmer and Reeves had deteriorated.

The prime minister had become irritated in part by what his aides saw as her attempts to position herself for a role in a potential future Andy Burnham government.

“He definitely feels the extent to which he has provided her with support in some challenging times only for it not to be reciprocated,” said one ally.

But the bigger problem was the ongoing row over the defence investment plan (Dip), which the prime minister seemed unable to solve.

The Ministry of Defence initially said it would need £28bn in funding over four years, but eventually pared that back to £18bn. The Treasury countered with £12bn, and would not be budged.

Eventually the prime minister agreed to invest £13.5bn, £10bn of which was new money, mostly from capital spending cuts to other departments.

On Monday, the prime minister presented his final plan to the defence secretary, expecting to encounter more resistance from the chancellor, who was upset about having to scale back programmes that would otherwise have boosted growth. Those close to Starmer say that by this point he had become frustrated by Reeves’s intransigence.

However, to the prime minister’s surprise, it was Healey who took against the plan, announcing his resignation on Thursday afternoon with a letter that torpedoed Starmer’s authority over his party and government.

“It might be the case that Starmer often just does what Reeves says,” said one ally. “But this wasn’t one of those occasions.”