Rachel Reeves’s spring statement was just as notable for what was left unsaid as for the points she raised. The chancellor made no mention of the poor or of inequality. There was no defense of the welfare state, no grand ambition for change, and no urgent call to action, even with the climate crisis at hand. While Labour vowed to break away from past practices, Reeves’s approach was more of a continuation dressed in a technocratic style. She presented Labour not as a party bursting with innovative ideas but as a capable manager, seemingly at ease with market-driven constraints on policy. Reeves depicted spending cuts as practical rather than ideological choices. In her view, “responsibility” translates to restraint rather than redistribution. Labour was once described as a moral crusade, but this seems to be neither for her.
Many within her party are likely to be disheartened, and that feeling may deepen upon examining the documents that accompanied her statement. The Office for Budget Responsibility (OBR) warns of rising unemployment. Unprotected spending is slated for real-term reductions, and it’s clear that welfare cuts are playing a significant role in deficit reduction, while tax levels hit record highs without equivalent social investments. For every individual her reforms help secure employment, more than 20 will experience financial hardship. It’s challenging not to view Reeves’s approach as a rebranding of austerity under the guise of “stability,” prioritizing fiscal prudence over the most vulnerable.
The fiscal rules themselves contribute to volatility, transforming each OBR forecast into a spectacle of budgetary performances. Economists find themselves peering through obscured lenses, relying on models that complicate more than clarify. The outcome is a predictable narrative of drama and tension. Adhering to these rules relies heavily on optimistic projections concerning growth, interest rates, and productivity. Even the OBR assigns only a 54% probability of Reeves meeting her targets. That’s essentially a coin flip.
Lackluster productivity, a slight uptick in interest rates, or an unpredictable trade disruption could easily upset her plans. These are not far-fetched scenarios, but credible risks in our unpredictable world. Her strategy leaves little room for these possibilities. From 2026-27, her rules will accommodate an additional 0.5% of GDP, roughly £13bn, in routine expenditures. Yet, to satisfy a rule that will be obsolete by its due date, she will push 250,000 more individuals into poverty—most from disabled households.
One of Reeves’s misleading strategies involves confusing capital investment with cuts to routine spending—the kind that keeps services operating rather than building new ones—thereby marketing austerity as ambition. While slashing funds, she highlights an added £2.2bn for defense and £2bn for affordable housing. The defense boost won’t spur demand, and the housing funds hardly offset the fallout from welfare cuts. She’s trimming the nation’s social wage under the guise of responsibility while bolstering military spending as investment. This maneuvering would make even former Chancellor George Osborne proud—surprisingly coming from a Labour chancellor.
Labour campaigned as champions of change. In power, it has acted more like accountants. The public has taken note and is tuning out. A survey from Ipsos Mori indicates that 62% of voters believe Britain is on the wrong track, with just 15% feeling otherwise. Reeves’s cautious fiscal approach hasn’t fostered confidence and won’t in the future. Voters are looking for clear, tangible improvements, particularly in living costs and public services—areas where Labour has not yet delivered. By prioritizing supposed credibility over genuine change, Labour risks alienating its voter base, managing a crisis it didn’t create but choosing not to challenge with the tools at its disposal. Reeves may refer to last year’s electoral victory to fend off criticism. However, if success is the sole measure of worth and ethics are optional, then failure becomes not merely defeat but also a disgrace.
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