Can Keir Starmer survive Rachel Reeves’s Budget? This is the question behind the scenes roiling the Chancellor’s preparations for a fiscal event at the end of this month.
Like the no-win medieval test of accused witches, it is hard to see a winning strategy. If Reeves prevails in what looks like her decision to raise income tax with no national insurance offset in order to buy herself the necessary headroom to ease the strictures of her too-tight fiscal rules, she will annoy many middle-income voters and break trust with a far wider group in the electorate.
If she backs away from it, she cannot deliver on backbench demands to get rid of the two-child benefit cap and fulfil her own pre-budget pitchroll about addressing cost of living rises, while bringing down debt interest payments which, it has finally dawned on Labour, are unproductively high at £9.7bn after a sharp rise this year. Neither can she then help re-set welfare and disability cuts on a more successful course by watering down the impact on poorer households. The black hole (probably around £20bn) remains just that.
That brings us back to the impact of these raw facts of the Reeves-Starmer relationship. In opposition, Reeves elbowed aside the soft-left incumbent Anneliese Dodds to get the job. Reeves’s pitch was that she was more technically experienced and would not make unforced errors. Yes, well.
Things have gone wrong for two reasons in areas where the PM and Chancellor share the blame but tend to pass the buck to the other. The decision to cut the Winter Fuel Allowance caused such a backlash that Labour was forced to make a U-turn. The resulting net saving is a paltry £450m: the reputational damage has been immense. Everyone involved – including Darren Jones, now the PM’s right hand enforcer – realised too late that what looked like a justified attack on wealthier pensioners landed like a Scrooge measure, uncomfortably reminiscent of the “cruel” Tories that Labour had lambasted in opposition.
The even bigger breach was the haphazard preparation of the Chancellor’s £5bn raid on welfare which was foiled by a backbench revolt and left Reeves (for reasons still opaque in the detail) in tears in the Commons and with badly dented authority. No longer do backbenchers fawn over the projection of this Chancellor as a financial chess prodigy who could see several steps ahead. As one newly appointed minister puts it: “If this were a grand master tournament, it would be a fools’ mate outcome.”
That is a dramatic two-move checkmate which happens if one side advanced pawns prematurely and the king is left swiftly undefended. The inside story of Labour right now shows King Starmer dangerously undefended. As this paper reported, there has been a rise in mid-ranking MPs who are unenthusiastic about him continuing after next May’s local election test and a deputy party leader in Lucy Powell who sees no reason not to think about life beyond him either.
Starmer is on a board now crowded with a number of knights and bishops seeing options for their own advancement in the present turmoil and lamentable poll ratings. That also means there are many fewer reasons for Starmer to stick to an embattled chancellor who might well be seen to have failed in one of the major duties of the job: protect the Prime Minister and his project. And while many figures, including reportedly David Lammy, now deputy prime minister, warned Starmer that he has spent too much time abroad, it is hardly a reassuring look to suggest that the reason a PM needs to stay at home more is to prevent his chancellor from further screw-ups.
Starmer and Reeves do not enjoy a close personal relationship. Starmer was, I gather, sensitive to the accusation that he had failed to respond in a more chivalrous manner to Reeves’s tearful moment in the welfare debate. At one level because he knows it looked bad, but he blamed Team Reeves for letting her go into the Chamber when she was so upset. Yet also because he could not see her reaction as he was facing the chamber – and felt unfairly attacked (the PM is thin skinned in such matters).
As a result of this and other internal wrangles, there has been a change of chief of staff around the Chancellor to Ben Nunn, an affably tough figure who has closely tracked the rise of Reform when other Labour folk were apt to dismiss or downplay it. Katie Martin, who had an emotionally close bond with Reeves some other staffers thought created “blind spots”, will now get to deal with disillusioned business folk full time.
If the chorus line changes, the plot remains the same. One problem two generally loyal backbenchers describe to me is a lack of clarity on how Reeves now intends to sell any tax rise on “working people”, given that it clearly breaches Labour’s manifesto. The factors named by the Chancellor to suggest her hand is being forced – Brexit, Tory years of sluggish growth, a darkening international picture and likely return of Donald Trump – were wholly apparent when she took office. One new backbencher says: “Now it is Starmer – and the rest of us on the Labour benches – propping her story up.”
Your next read
square VICTORIA DERBYSHIREMy sons have left home and I’ve accidentally become a helicopter parent
square DR MICHAEL HALLSWORTHI’m a behavioural scientist – breaking bad habits has nothing to do with willpower
square STEFANO HATFIELDSorry, but we should all be paying more council tax
square OLIVER DUFFThe parable of the jester who fooled them all
The alternative “ducking stool” model is that she backs away from a wider-impact tax rise and goes much harder on the “tax the rich” moves on capital gains tax and goes further in a flirtation with “exit taxes” on wealthy folk planning to flee all this for some time in Milan, Dubai or the like.
More sober voices, including one expert who has advised Reeves on non-dom tax policy, doubt the wisdom of alienating investors who were unimpressed by Reeves’s first Budget. They hate the “exit tax” idea, first because it is vanishingly hard to actually claw back money when people go – and also because it is a guaranteed way of ensuring they never want to come back to Blighty.
All in all, the choices Reeves will make in the Budget will likely lead to a further downgrade in confidence in the Government. And if checkmate looks like the outcome – whose crown will fall first? If it comes down to the PM’s or the Chancellor’s, my bet is that it will be the Queen, not the King who is moved from the board.
Anne McElvoy is co-host of Politics at Sam and Anne’s podcast
Hence then, the article about how budget chaos is hurting reeves and starmer s relationship was published today ( ) and is available on inews ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( How Budget chaos is hurting Reeves and Starmer’s relationship )
Also on site :
- Belgium corrects US on ‘peace board’ claim
- Vue Cinema Chain Halts Liquidation Threat From Coca-Cola Bottling Giant After Settling Unpaid Bill
- Numbrix 9 - January 23