Keir Starmer has labelled Reform as his party's 'main rival' for power (Image: Getty)

       Rachel Reeves is set to announce a multibillion-pound investment package in the north and Midlands as Labour look to counter the threat of Reform UK. The announcement is set to come in next month’s spending review and could see money allocated for spending in the southeast redistributed to the Red Wall, with many seats under threat from Nigel Farage’s party.

       Areas such as road, rail and green energy could benefit from up to ￡100 billion of capital investment as Reeves prepares to tear up her own fiscal rules. If the announcement is made, Reeves will be able to fund extra spending on new infrastructure projects with borrowing, without breaking her pledge that day-to-day government outgoings are met from tax receipts. It comes amid growing panic from Labour MPs at the threat Reform poses to marginal seats across the country following a series of missteps and errors in the government’s first year in office.

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       The government have made development outside of London and the Home Counties are priority (Image: Getty)

       Keir Starmer has told Labour MPs that Nigel Farage’s party is their “main rival for power,” with Reform consistently topping polls or placing higher than the Conservative party.

       Yesterday, he used part of his speech at a business in the north-west of England to attack Farage for promising unfunded tax cuts and believing in "fantasy" economics.

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       He said: "In opposition we said Liz Truss would crash the economy and leave you to pick up the bill,

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       "We were right. And we were elected to fix that mess.

       "Now in government, we are once again fighting the same fantasy – this time from Farage."

       Starmer’s outburst was labelled as “desperate” by Reform and came just days after a major speech by the party in which Farage declared that they had become "the party of working people".

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       Starmer used a speech in the north to blast Reform policies (Image: Getty)

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       He claimed that Labour are “absolutely terrified of Reform” and highlighted their poor performance at the local elections as proof of the government "collapsing in terms of support".

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       He said: "We completely wiped them out in County Durham, in many other parts of the East Midlands and elsewhere."

       He added: "This prime minister has no connection with working people. No connection with what we used to call working-class communities.

       "He doesn't understand what it's like to get up at 5 o'clock in the morning and go out and work physically hard for the time, he doesn't seem to understand that the tax burden, the cost of living, energy bills have meant that people genuinely have had a lower standard of living, quite consistently, over the course of the last 10 years."