I’m genuinely sorry to hear that Rachel Reeves is depressed. Just a few months ago she was brimming with energy. So full of plans, and so full of herself. Her fall from grace has been swift.
And all her own fault.
So many missteps in such a little space of time would have anyone reeling and rethinking their entire world view. As she must because hers makes no sense.
Reeves genuinely believed she could stimulate an over-taxed economy by taxing it more.
She thought making it more expensive for employers to hire would somehow boost employment.
Or that burdening small businesses with inheritance tax would inspire entrepreneurship.
Or that inflation-busting pay rises for public sector workers would magically enhance productivity. Instead, unions now clamour for a four-day week – or even three. With full pay, naturally.
As if that weren’t enough, Reeves seemed convinced that publicly lamenting the dire state of UK finances would endear us to the bond markets and secure loans at reasonable rates.
No wonder she’s down in the dumps. We all are.
No longer full of life, Rachel Reeves now resembles the living dead. In office, but no longer in charge of events. A zombie chancellor.
Rachel Reeves is no longer managing the UK economy. She doesn’t decide things anymore. As I wrote the other day, the bond market is in charge now.
Basically, it’s telling her what to do.
That’s what happens when a chancellor shows they haven’t got a clue how a real life economy works. Decisions are forcibly taken out of their hands.
It happened to former Tory PM Liz Truss. She still roams the earth moaning that she was right all along, but nobody’s fooled.
Truss is politically deceased, and so is Rachel Reeves. That’s the price politicians pay for crashing the economy.
Truss did it by green-lighting £42billion of unfunded tax cuts. Reeves produced the same result with her £70billion tax and spend splurge.
Both thought economic growth would magically make their sums add up. Both fell victim to the bond vigilantes, who punish governments that play fast and loose with a nation’s finances.
Bond vigilantes are swift to smell zombie blood. And swift to pull the trigger, too.
Keir Starmer won’t be so quick. Yesterday he ambled to Reeves defence, insisting she would remain Chancellor for the full five-year term of this Parliament.
He had little choice. She’s his pick after all. Plus he’s just lost Treasury minister Tulip Siddiq following a corruption scandal, and can’t afford to lose two allies in a week.
Starmer is steadily morphing into a zombie Prime Minister. Or perhaps he’s always been one. His lifeless demeanour is on full display whenever he’s in front of a TV camera.
Ultimately, Starmer won’t decide Reeves’ fate. That power rests with the bond vigilantes. They now call the shots on everything, just as they did under Liz Truss.
Labour will increasingly resemble a zombie government. Given its record, that might be a blessing.
For now, we’re stuck with Rachel Reeves, but sooner or late the bond vigilantes will pull the trigger, and she’ll be gone.
Until that day, we have one grim consolation. Reeves is likely to inflict far less damage as a political ghost than she ever did while in power.
