Things are starting to look really bad for Rachel Reeves.
Rachel Reeves won’t get much spare change from her cabinet colleagues (Image: Getty)
The Chancellor is under fire on all fronts. She inherited a £22billion black hole in the public finances and has somehow inflated it to as much as £50billion. The UK is on course to borrow around £126billion this year, making our debt mountain even higher.
Her attempts to cut costs have blown up in her face, with proposals to scrap the Winter Fuel Payment for most pensioners and rein in disability benefits collapsing in humiliating U-turns.
Her credibility is shot. Reeves has been forced to draft in Torsten Bell to write a second Budget after making a complete hash of her first. And he’s a tax-obsessed nitwit who needs reining in more than she does.
Prime Minister Keir Starmer no longer trusts her, surrounding himself with outside experts to keep her in line.
Businesses have turned against her as she drives up employment costs, squeezes profit margins and pushes companies to the brink and beyond.
Her Budget destroyed at least 174,000 jobs and Angela Rayner’s Employment Rights Bill will make hiring even more expensive, unless Starmer grabs his chance to axe it. Reeves is trapped: she can’t cut spending in case Labour MPs rebel, refuses to break her self-imposed fiscal rules, and so falls back on more taxes.
Now she’s been reduced to begging.
Labour cabinet ministers are resisting her every step. They’re desperate to shield their departments from cuts, aware that slashing budgets could wreck their own career prospects.
Cabinet rows have become entrenched, with no appetite for savings and plenty for self-preservation.
Reeves has resorted to going cap in hand, pleading with colleagues to find spare change, hoping it will somehow add up.
Yet there’s fat chance they’ll listen. Labour MPs did not sign up to deliver what they will view as Tory-style austerity.
Ministers want to spend freely and make their mark. Reeves can bully, cajole and beg, but her colleagues are not going to bail her out. At best, they’ll throw her a few pennies.
This is partly her own mess, but mostly it is the Labour Party’s.
Starmer’s backbenchers did not become MPs to talk about balanced budgets or bond yields, they joined to hand out government money and bask in the applause. But the days of easy money are gone.
The bond markets are already charging a premium for lending to the UK, unconvinced Labour can be trusted to spend wisely.
Reeves has woken up to that reality. She now talks the language of investors, not activists, because she knows which side holds the whip hand.
The problem is that anything she does will be shot down by her own deluded party, in full view of the bond market.
The Chancellor may have her begging bowl out, but Labour’s ministers are too busy fighting their own corners to fill it.
She might as well be rattling a tin on Whitehall for all the good it will do her. If her second Budget is as bad as the first (and it could be even worse), that might even be her next step.
