Rachel Reeves is under pressure from the opposition, who are calling for her departure. But she retains the confidence of Prime Minister Keir Starmer, who is sparing himself a major crisis for the moment.
Criticized both for her tax increases and for the general state of the economy, British Finance Minister Rachel Reeves is under pressure from the opposition, who are calling for her departure. But she retains the confidence of Prime Minister Keir Starmer, who is sparing himself a major crisis for the moment.
“Rachel Reeves is doing a fantastic job. She has all my confidence. She has the full confidence of the entire party,” assured the head of government on Monday, when pressed for questions about the future of Chancellor of the Exchequer – her official title.
The departure after barely six months of one of the main faces of the executive would not be without risk: Keir Starmer would be faced with a major political crisis and, perhaps even more serious, the economic slump in which stuck the United Kingdom risks getting worse.
“On a thread”
The country is already facing sluggish growth and the unprecedented tax increases announced at the end of October by Rachel Reeves in her budget are undermining the morale of businesses, which continue to warn of their consequences in terms of employment and inflation .
Concrete repercussions: the loss of market confidence, a pound at its lowest and a debt borrowing rate at a level not seen in 25 years, which will force Labor to make a choice between further increasing taxes, reducing spending or limiting borrowing.
Rachel Reeves has not yet had the opportunity to speak on the subject: she was in China this weekend, a long-planned trip which also earned her criticism.
“She is hanging on but is hanging on by a thread,” said Kemi Badenoch, leader of the Conservatives, for whom Keir Starmer and she have “brought the British economy to the ground”.
More lenient, the Liberal Democrats, the third political force in the House of Commons, limited themselves to calling on the minister to “announce a serious plan for growth”, remove her tax increases and rebuild the economic relationship with the European Union. .
-“It will take time”
“We have never claimed (…) that after 14 years of failure (of the conservatives in power, editor’s note), it was possible to restore our economy and our public services before Christmas,” Keir Starmer repeated on Monday. “Before the elections, I said it would not be possible to do it in six months. It will take time.”
The United Kingdom is not the only country affected by the increase in the cost of debt, which affects other Western countries including the United States.
Keir Starmer, however, seems caught in the middle, forced to choose the solution which will worry the markets the least: dismissing or keeping his minister.
On a political level, the departure of Rachel Reeves would also constitute an undeniable setback for Labor, which is already facing calls for the resignation of another minister, Tulip Siddiq, cited in investigations in Bangladesh for corruption targeting her aunt, the Former Prime Minister Sheikh Hasina.
The honeymoon between the government and the British after their return in July lasted only a few weeks. The recent proliferation of “plans” of all kinds – on health, immigration, green energies and even artificial intelligence on Monday -, often promises without immediate implementation, seem to have no effect on public opinion .
Billionaire Elon Musk, right-hand man of President-elect Donald Trump, has clearly sensed this vulnerability, having been trying for days to further destabilize Labor.
“No one trusts Starmer (…) He has created a financial crisis in Great Britain,” the owner of X recently argued on his network.
Another danger less than ten days before Donald Trump returns to business.