The Labour Chancellor is not in a good place.
Being Chancellor is destroying Rachel Reeves. She needs help (Image: Getty)
Readers may assume I’m talking about No 11 Downing Street. Living and working there certainly hasn’t done her much good, and it’s been a disaster for the rest of us. The UK economy has stalled on her watch while everything else races away: unemployment, inflation, borrowing costs, the deficit and national debt.
Reeves is now the most unpopular Chancellor since records began. That can’t be nice. Like I said, No 11 is not a nice place to be right now.
We caught a glimpse of what the job’s doing to her when she burst into tears in Parliament, and again at yesterday’s pre-Budget press conference. She looked pale, distracted, drained. I hope someone in Labour is looking out for her. But I doubt it, because the party is now the main source of her woes.
Reeves and Labour won power by claiming they would boost public spending without hiking taxes on “working people”, while somehow being fiscally responsible as well. It was a terrible mistake and Reeves is being punished for it. As are taxpayers.
In her first Budget, she unleashed a £25billion tax on jobs, destroying hundreds of thousands of them, and slapped inheritance tax on our pensions, hard-working farmers and small businesses.
On November 26, she’ll double down by taxing our incomes, pensions (again), savings, inheritance and even our homes. This at a time when the tax burden is already at an 80-year high.
Reeves never secured an electoral mandate for such a radical step, and voters will resent her for it. Reeves knows this. Yesterday, she tried to deflect blame onto the Tories, Trump, Farage, Putin and “challenges of a global nature”, but it won’t wash.
Reeves knows that too. She also knows the state now swallows around 45% of national income and urgently needs reining in, but she can’t do it.
Why? Because the Labour Party won’t let her. It’s now her worst enemy. Not the Tories, not Trump, not Farage, not Truss and not even critical journalists like me. But her own party.
Labour’s MPs won’t let Reeves do what she knows needs to be done: cut the spiralling welfare bill and get Britain back to work. She tried in her last Budget, with modest welfare reforms worth £5billion, but even that triggered a backbench revolt. The policy was ditched within days.
The left wants Reeves to tax, tax and tax again, even if it destroys growth as Reeves must surely know it will.
And that’s not the only way the left is bent on thwarting her. They also believe Labour can borrow endlessly and spend, spend, spend.
Reeves knows that if she tried, the bond markets would panic and our borrowing costs would rocket. It would be another Liz Truss moment.
Yet the left still wants to tell the bond markets to “get lost” and borrow anyway. Gormless Labour leadership contender Andy Burnham is peddling the same fantasy.
Reeves, under the hard glare of the Treasury, has woken up to fiscal reality. Her party hasn’t. It still wants to spend its way to utopia.
And that’s what will destroy her. Labour won’t let her do what she knows she must, balance the books and restore credibility.
She can’t borrow more. Can’t spend more. But that’s all Labour is in government for. Her face reflected that cruel reality yesterday. Rachel Reeves must now realise she’s in the wrong political party, and it’s going to break her.
