Starmer Vows to Keep Embattled Treasury Chief Reeves Despite UK Economic Calamity

Downing Street insisted Monday that Britain’s embattled Treasury chief will remain in office for the remainder of the left-wing Labour government’s term as Westminster speculation swirled about a potential change given the faltering UK economy.

Chancellor of the Exchequer Rachel Reeves’ job is apparently safe despite economic turmoil continuing after her fall budget, with government borrowing costs hitting their highest level since the 2008 crash and the pound falling to a 14-month low against the U.S. dollar, according to the BBC.

While the Labour Party swept to power in July on the back of a promise to return the UK economy to growth, there does not seem to be any prospect of escaping the anaemic economic output on the horizon. Statistics on inflation and growth set to be published this week are both expected to prove bad news for the fledgling leftist government.

The poor state of affairs for the British economy is in part due to mismanagement by previous Tory governments, which oversaw the imposition of the highest tax burden on the public since the Second World War to pay down debt driven up by government lockdowns during the Chinese coronavirus.

However, despite promising a growth agenda, Reeves doubled down on the high-tax and spending agenda of the Tories while simultaneously blaming the former government for supposedly leaving a £22 billion “black hole” in the nation’s finances, which she claimed forced the Treasury into imposing £40 billion in fresh taxes.

With Reeves having been out of the country — controversially visiting Communist China to kowtow to Beijing in hopes of investments into Britain’s financial markets — speculation began to ramp up at home, with even fellow Labour MPs reportedly questioning behind the scenes if Reeves should go.

Upon her return to the UK on Monday, rumours ramped up of her potential ouster even more after Prime Minister Starmer seemingly left the door open to Reeves being replaced, having merely said that she had done a “fantastic job” and that he had “full confidence” in her. In British political parlance, it is a longstanding joke that the Prime Minister saying he has “full confidence” in a beleaguered minister is the final step before them being asked to resign.

Nevertheless after growing pressure, Downing Street finally decided to back Reeves fully, with a Number 10 spokesman saying that the prime minister would be “working with her in the role of chancellor for the whole of this parliament.”

Yet, despite the vote of confidence from Starmer, tough sledding lies ahead for the Treasury chief. According to the Times of London, if government borrowing costs remain at their current levels, it would essentially wipe out the chancellor’s “£10 billion headroom” for her goal of balancing the nation’s budget by the end of the current parliament.

Prime Minister Starmer has said that his government would be “ruthless” in its efforts to balance the books, indicating that more spending cuts will likely be in the offing in Reeves’ spring budget. The government has come under heavy scrutiny for previous cuts, notably for winter fuel aid for seniors during the ongoing energy crisis, and would likely face an internal battle within the left-wing Labour Party over additional cuts, given the party’s long history of railing against ‘Tory austerity’ measures.

Conversely, implementing supply-side measures that would likely grow the economy and thereby decrease the strain on the nation’s finances is likely off the table, given Labour’s insistence that the 2022 bond market crisis was a result of the short-tenured government of Liz Truss attempting to cut taxes to stimulate growth. While the Bank of England has tacitly admitted that the crisis was, at least in part, a product of its own monetary policies, the myth that tax cuts were to blame persists within Britain’s media and political establishment.

Truss, who has claimed that a deep-state coup ousted her from office and threatened to sue Starmer if he persists in blaming her for the economic crash, argued this week that the government’s only way out of its current predicament would be to return to the policies she advocated for, including cutting taxes and regulations and lifting the ban on fracking to spur domestic energy production.

With such recommendations likely to go unheeded and the economic turmoil likely to persist, Labour will likely continue to bleed support to the Reform party of Nigel Farage, who was listed this month as the most trusted politician in the country to grow the economy. After coming in third place in voting in July’s general election, multiple polls over the past week have put Reform on par with Labour for the lead in Westminster voting intention.

Follow Kurt Zindulka on X: Follow @KurtZindulka or e-mail to: This email address is being protected from spambots. You need JavaScript enabled to view it.