Reeves will raise spectre of Truss to persuade Labour MPs to accept cuts

Rachel Reeves will raise the spectre of Liz Truss's disastrous mini-budget in the lead-up to next week's spring statement as she tries to persuade her Labour colleagues to accept the steepest departmental cuts since austerity.

- Kiran Stacey

The chancellor will tell her fractious party she has decided to cut public spending rather than increasing borrowing because of the risk of repeating the former prime minister's disastrous fiscal statement in 2022.

The rise in borrowing costs that followed that announcement hurt the poor more than the rich, she will argue, in an attempt to rebut growing criticism that Labour has abandoned poorer people by cutting welfare, aid and public services.

"It was not the wealthy or the rich that paid the price for the mini-budget," said one ally of the chancellor. "It was working people."

The person added: "Labour only won because the public trusted us with their money. We are not about to undermine that now."

Reeves heads into next week facing an increasingly uneasy party, with many MPs and ministers upset by the recent decisions to slash aid to spend on the military instead and to cut disability benefits by £5bn.

She will announce on Wednesday that she is also cutting public spending by several billion pounds in an attempt to meet her fiscal rules, which have been put at risk by stagnant growth and high government borrowing costs.