OPINION
Keir Starmer and Rachel Reeves (Image: Getty)
How much humiliation can Rachel Reeves take? There’s speculation among Labour MPs that the Chancellor is set for the chop. Rachel may not be around to deliver the autumn Budget statement in October, they say. Perhaps there’s an element of wishful thinking to this. Some Labour politicians may be predicting Ms Reeves’s demise because they dearly wish she would go. They see her as a liability.
Others have a more nuanced take. They believe the problem really lies in Number 10, where there is a lack of direction and an inability to communicate with either the public or the Parliamentary Party. Sir Keir Starmer became Labour leader to save Labour from Jeremy Corbyn’s acolytes but didn’t know what he wanted to do if he actually became Prime Minister, they say.
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As a result, this Labour government has become best known for confusion and controversy over benefit cuts, attacks on pensioners and farmers and threats to cut departmental spending - all issues Ms Reeves is heavily involved in.
The next big Treasury event will be the Spending Review on June 11, when the Chancellor will set out budget allocations for the years ahead. This will determine everything from how much money schools receive to whether main roads get an upgrade.
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If the spending review goes wrong then the pressure will be on both the Prime Minister and the Chancellor. But in a situation like this, it’s never the Prime Minister that takes the fall.
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Ms Reeves could be sacrificed as Sir Keir attempts to “reset” his government, some of her colleagues predict.
How did it come to this? The rot set in almost as soon as Labour came to power, when Ms Reeves announced she was removing winter fuel payments from more than nine million pensioners.
It was one of the first big decisions of the new government, certainly the first anyone remembers - with the exception perhaps of her simultaneous announcement of above-inflation pay rises for public sector workers, including 5.5% for NHS workers and teachers.
The pay hikes cost ￡9.5 billion. Removing winter fuel payments saved just ￡1.3 billion in the first year.
Eventually, after journalists submitted Freedom of Information requests and MPs demanded details, the Government admitted the decision would plunge 100,000 pensioners into poverty.
The problem wasn’t just that the policy was bad. It was also that the Government had little else to talk about.
There were no “quick wins” or measures that made the average voter better off (unless they were a teacher or nurse), Instead, the government began paving the way for tax hikes in the Chancellor’s first Budget, warning that she would need to plug a “black hole” in the public finances.
Former Labour leader Tony Blair’s theme song was “Things Can Only Get Better” while former Conservative leader David Cameron once declared: “Let sunshine win the day!”
There was none of that optimism from Keir and Rachel. They told us things could only get worse.
But this was just the start. When the Budget finally came we had a hike on employer National Insurance contributions, effectively a tax on jobs. Aren’t jobs a good thing?
Farmers were clobbered by inheritance tax changes, threatening the future of family farms. It’s an open secret at Westminster that Environment Secretary Steve Reed hated the idea but his objections were ignored.
And the Chancellor was heavily involved in the later decision to remove Personal Independence Payments from hundreds of thousands of people with a disability or long-term illness, part of a package of benefit changes which the Government says will increase poverty by 250,000 people.
Where’s the good news? What is the country getting in return for all this pain?
Some Labour politicians will argue that there is, in fact, a good story to tell. For example, the Government is fixing Britain’s broken rail system and improving bus services, they say.
And all this talk about investing in infrastructure and axing red tape, allowing the UK to build more power stations and factories, is exactly what the economy needs, they argue.
But the government is doing a lousy job of explaining any of this either to its own MPs, or to the public.
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There is despair at Number 10’s failure to communicate its message.
Many hoped things would improve after former Director of Communications Matt Doyle, a veteran of the Blair government, quit in March allowing former Daily Mirror journalist turned communications guru James Lyons, who joined Keir Starmer’s team last year, to play a bigger role.
But that hasn’t happened. Sir Keir has a clear strategy on the global stage, tough on Russia dictator Vladimir Putin and charming with Donald Trump, but there is still no “narrative” at home.
However, that doesn’t let the Chancellor off the hook.
“If the political operation in Number 10 isn’t good then the Chancellor needs their own operation,” said one old hand. Referring to former Labour Chancellor Gordon Brown, they said: “Do you think Gordon Brown would have got himself into this mess? Of course he wouldn’t”.
And Mr Brown was good at making a u-turn when things went wrong. When a planned increase in petrol duty led to protests, for example, he rapidly backed down.
The current lot can’t even reverse gear efficiently. Keir Starmer has indicated that winter fuel payments will be restored to at least some of the pensioners that lost it (it’s notable that he made this announcement rather than the Chancellor - suggesting it was his decision).
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But nobody seems to know how many will get the cash, and whether they will receive it this winter or have to wait until the Christmas of 2026.
Bizarrely, a public row has even broken out over when answers should be provided, with Deputy Prime Minister Angela Rayner calling on the Chancellor to reveal the details within a fortnight, only to be slapped down by Number 10. The official line is that we must wait for the next “fiscal event” for more information, which appears to mean the October Budget.
It’s chaos. And the longer it lasts, the more Rachel Reeves’s future is in doubt.
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