Rachel Reeves’s claim that she is Britain’s ‘Iron Chancellor’ has been demolished by a torrent of public spending in the first half of this financial year.
Reeves says she has been fixing the foundations of the economy. Yet nothing she has said or done since coming to power has moved the dial – not in a positive direction.
Instead, this government has made a bad situation even worse – which is why next month’s budget will be even tougher and more destructive than predicted.
The latest figures show that government borrowing soared to a fraction under £100billion in the six months to September. We are £11.5billion further in debt than at the start of the year, despite the unprecedented £40billion tax-raising budget of 2024.
What good did all that painful medicine do us? None at all, it would seem.
Britain now faces a further round of tax increases as the Treasury tries, somehow, to close a budget ‘black hole’ now estimated at £30billion.
Far from taking an ‘iron’ grip, Reeves is presiding over record outlays – a level of spending never before seen in peacetime aside from during the pandemic.
Spending by central government and local authorities is set to hit an unsustainable 45 per cent of Britain’s total economic output this year.
Far from taking an ‘iron’ grip, Rachel Reeves is presiding over record outlays – a level of spending never before seen in peacetime aside from during the pandemic, writes Alex Brummer
Despite Reeves’s contention that she has put an end to Tory profligacy, the chancellor’s stewardship – in particular her failure to control soaring bills for welfare and interest payments – has been an economic catastrophe.
Reeves should accurately be viewed not as the ‘Iron Chancellor’ but the ‘Plastic Chancellor’ because the Government credit card is swiped so often and so lavishly – and with such little self-control.
A troubling twofold surge – in tax receipts and borrowing – casts a dark shadow over Britain’s prospects.
The more money our government borrows and spends, the higher its interest rate bills will be. And the harder it will be for the private sector to borrow and invest.
The cost of serving the national debt was £67billion in the six months to September, a 17 per cent increase on the previous six months. It is more than the annual £55billion Whitehall spends on police and public safety.
This ‘crowding out’ by a government which thinks it knows best is profoundly detrimental to future economic output. Corporate Britain has already cut 143,000 jobs from its payrolls since Labour took office in July last year.
Yet, in contrast, some 138,000 new state jobs were added in the 12 months to June 2025. This has vastly increased the Government wage bill, not to mention Britain’s future pension obligations.
Ahead of the November 26 Budget, Reeves seeks to blame everyone but herself.
Chancellor Rachel Reeves attends the G20 meeting during the IMF annual meetings in Washington last week
She is spitting tacks at the Office for Budget Responsibility (OBR), which has chosen to lower its forecasts for productivity and growth.
Yet this was the chancellor who pointedly gave the OBR new powers aimed at keeping a lid on spending, borrowing and debt – all of which have rocketed during Labour’s 16 months in office.
Any excuse will now do. At the International Monetary Fund’s gathering in Washington last week, Reeves argued that Britain’s growth difficulties had been ‘compounded by the way in which the UK left the European Union’.
Yet she is seeking to convince the OBR that trade deals with the United States and India – impossible to strike had the UK had remained in the Brussels chokehold – should be seen as growth-enhancing!
When she stands up in the House of Commons next month, the Chancellor is widely expected to target the better-off among us through further levies on wealth.
This is even though new data from the tax authorities show the top one per cent of United Kingdom taxpayers already account for one-third of all revenue from income and taxes on capital gains.
The richest 100,000 people paid more than £54.9billion of the income gathered by His Majesty’s Revenue and Customs.
A further assault on the wealthiest citizens is likely to see entrepreneurs, wealth creators, bankers, and financiers driven offshore.
It makes a nonsense of Reeves’s effort to attract to attract global talent through high-skilled visas.
Rampant consumer price inflation – already up 3.8 per cent this year – is only adding to the woes.
Today, the mood is of huge uncertainty, thanks partly to the long wait for this year’s delayed autumn budget and also to fears of further swingeing tax increases.
Citizens are saving rather than spending to protect themselves from further punishment.
Even no-frills retailers such as Poundland and B&M are suffering. Their sales are plummeting as working people try to shield themselves from the next government assault.
None of this will end well. Vows to business leaders that the Government would not be ‘coming back for more’ after last year’s tax-raising extravaganza will almost certainly be proved an outright lie.
Despite their many promises, Sir Keir Starmer and Rachel Reeves are the architects of a Leftist tax, spend and borrow culture. It is impoverishing us all.
