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.

The chancellor will tell her fractious party she has decided to cut public spending rather than increasing borrowing because of the risk of a similar fallout to that which followed the then 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 say, in an attempt to rebut growing criticism that Labour has abandoned poorer people by cutting welfare, foreign aid and public services.

One ally of the chancellor said: “It is not the wealthy or the rich that paid the price for the mini-budget. It was working people.” They 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 increasing unease in her 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.

On Wednesday she will announce plans to cut public spending by several billion pounds to try to meet her fiscal rules, which have been put at risk by stagnant growth and high government borrowing costs.

The difficult economic backdrop was underlined on Friday when the Office for National Statistics announced the government had borrowed £10.7bn last month, far more than the £6.6bn economists had expected.

Several ministers voiced their disquiet about next week’s cuts at a tense cabinet meeting last week, sources say – including the energy secretary, Ed Miliband, the deputy prime minister, Angela Rayner, and the justice secretary, Shabana Mahmood. Some raised the example of Germany, where the government recently changed its fiscal rules to spend more on defence.

David Blunkett will add to the pressure on Reeves to adapt her fiscal rules this weekend.

In an interview with BBC Radio 4’s Week in Westminster, the former education secretary will say: “I would raise the self-imposed rule by at least £10bn-£15bn, and I would spend a great chunk of it on what we did back in 97 with the new deal for the unemployed – getting half a million of those young people who are out of work and training into a job or a training programme.”

Treasury officials dismiss the idea of changing Reeves’ fiscal rules, which say she must be forecast to have debt falling as a percentage of GDP and to have the day-to-day budget in balance by 2029-30. “We have already changed the fiscal rules,” one said, pointing to last year’s decision to make it easier to borrow for capital spending.

Reeves has also rejected the idea of introducing a wealth tax to help balance the budget, say those close to her, believing such measures are too easy to dodge because of how easy it is for rich people to move their assets offshore.

“Even if we were to do a wealth tax, it would not get us much,” said one. “Ed Miliband’s mansion tax [which the energy secretary proposed when he was Labour leader] was only going to raise £700m-£1.5bn. That would not solve our problems.”

Reeves’s allies are frustrated her Labour colleagues have not given her credit for borrowing and taxing more at last year’s budget to pay for a £70bn increase in spending.

The chancellor will also try to placate her critics by spending more money on tax collection, in plans she will announce next week, which forecasters at the Office of Budget Responsibility say will raise an extra £1bn by 2029-30.

Under Reeves’s plans, the government will recruit an extra 600 staff to HMRC’s debt management teams and will spend £80m on contracts with private debt collectors to help them recover unpaid taxes. HMRC will get an additional £100m to recruit an extra 500 compliance officers from April.

The chancellor will announce steeper penalties for late payers, starting next month. If someone is 15 days late paying their taxes, the fine will rise from 2% to 3%. If they are more than a month late, it will jump from 4% to 10%.