Chancellor does not rule out real-term cuts to some government departments, amid concern from some about sombre approach

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The public understand the current need for sacrifices to stabilise the economy, Rachel Reeves has argued before her Labour conference speech, with the chancellor facing pressure from some Labour MPs to lift what they see as the government’s gloomy approach.

Stressing that there was a “prize” ahead if the fiscal situation could be improved, Reeves insisted there would be no return to austerity – but also refused to rule out some government departments facing real-terms cuts.