Spring is typically seen as a time for growth and new beginnings, but for Rachel Reeves, this season is shaping up to be more about reckoning with the consequences of her first Budget.
The upcoming Spring Statement on Wednesday will serve as a painful acknowledgment of the economic fallout caused by her decision to raise taxes by around £40 billion—primarily targeting employers.
This move has acted like a freeze on the growth she had hoped to nurture in the economy.
The Pro-Growth Promise That Fell Short
Reeves entered the role of Chancellor with a bold promise, claiming she would lead “the most pro-growth, pro-business Treasury the country has ever seen.”
However, her actions since then, particularly the tax hikes and public expenditure cuts, have cast doubt on her ability to live up to this commitment.
The cuts, which she now justifies by citing global changes, seem to overlook the fact that many of these shifts were already anticipated when she presented her Budget last year, even before Donald Trump’s potential return to the White House became clearer.
Is Reeves the Strategic Leader She Claims to Be?
Reeves has often been lauded for her ability to think several steps ahead, a claim supported by Keir Starmer’s former director of strategy, Deborah Mattinson.
However, her recent political moves, particularly her Budget, suggest a different narrative—one where strategic foresight is replaced by reckless gambles.
The tight fiscal rules she set for herself, allowing only £9.9 billion in leeway, appear more like a pre-election tactic than a sound economic strategy.
The latest figures from the Office for Budget Responsibility, showing a £20 billion gap in public borrowing, underscore the negative effects of her policy decisions.
What was once marketed as a carefully planned economic approach now feels more like a crisis management response.
The Legacy of ‘Securonomics’ and Missed Opportunities
Reeves had coined the term “Securonomics” to describe her approach to economic stability, but the term has become little more than a buzzword with no tangible impact.
Her Mais Lecture last year, intended to outline the long-term strategy for the UK economy, instead seemed to distance her from past economic policies, including those of Nigel Lawson, whose tenure as Chancellor she criticized.
While Lawson’s economic policies are widely regarded as successful in fostering strong growth and reducing public expenditure, Reeves’s actions have been far less effective.
The most notable misstep has been the creation of a fabricated £20 billion “black hole” to justify her tax hikes, despite her previous pledges to avoid new taxes during the election campaign.
The Demographic and Economic Challenges at Play
Reeves’s fiscal challenges are further complicated by the changing demographic landscape.
As the Baby Boomers enter retirement, the pressure on the benefits system has increased—a challenge that previous Chancellors like Margaret Thatcher and Nigel Lawson did not have to navigate.
Despite these difficulties, the response should have been more thoughtful and grounded in long-term solutions rather than hasty tax hikes and austerity measures.
Rachel Reeves’s Political Identity and Her Father’s Legacy
Reeves recently made headlines when she removed a portrait of Nigel Lawson from the Chancellor’s office in favor of one of Ellen Wilkinson, a Labour figure from the past.
While this was entirely her prerogative, it signals a broader trend of distancing herself from the Conservative economic legacy that shaped much of the UK’s modern financial system.
However, it would have been more constructive for Reeves to acknowledge the successes of her predecessors, particularly when it comes to tax reforms.
What’s Next for Rachel Reeves?
As the first female Chancellor, Reeves has made strides in representing women in positions of power.
Yet, her policies have not matched her gender-focused rhetoric.
Her father, in his time, made groundbreaking changes in tax policy that allowed married women more independence, a legacy that remains a landmark achievement in British economic history.
By contrast, Reeves’s claim of being the “first green Chancellor” has already fallen by the wayside, replaced by a pragmatic shift toward expanding airports like Heathrow and Gatwick.
Despite the criticism and setbacks, Rachel Reeves has proven herself to be a determined fighter.
However, whether she can evolve in the job and deliver the growth she promised remains uncertain.