Rachel Reeves tears expose Labour's hollow victory
The cost of campaigning on nothing is becoming clear
The toll of the night before was written across Rachel Reeves face as she sat behind Keir Starmer, and within camera shot, at an unforgettable session of Prime Minister’s Questions on Wednesday.
On Tuesday night, the UK's first female Chancellor of the Exchequer was forced to gut a flagship bill designed to pare back Britain's out-of-control benefits bill after Labour MPs, many of them newly elected, rebelled.
This year, the UK is forecast to spend £316.1 billion, or 10.6 per cent of its GDP, on social security.
The bags under Reeves’ eyes dominated her face. Her mouth drooped, and she looked like she was struggling to hold an expression. It was a picture of a woman in anguish.
The tragic sight made for Kemi Badenoch’s best day as Leader of the Opposition.
‘The Chancellor is pointing at me, but she looks absolutely miserable,’ Badenoch said.
‘Labour MPs are going on the record saying that the Chancellor is toast.
‘The reality is that she is a human shield for the Prime Minister’s incompetence.
‘In January, he said that she would be in post until the next election. Will she really?’
What happened next may go down as the start of the end of Reeves’ career and possibly even the prime minister’s.
Keir Starmer not only refused to endorse his Chancellor, he didn't even mention her name or refer to Reeves once.
Furthering the complete lack of emotional intelligence he displayed, he chose to taunt Badenoch about her own political career not lasting.
A single tear ran down Reeves’ cheek and her mouth quivered as Starmer spoke. It was a cruel sight.
‘How awful for the Chancellor that the Prime Minister could not confirm that she would stay in place,’ Badenoch said.
Reeves’ tears continued throughout Question Time. At the end, her sister Ellie, also an MP, came and ushered her from the frontbench.
The Chancellor’s office said she was upset about a ‘personal matter’ but did not elaborate on what.
Starmer later said Reeves would be chancellor for ‘a very long time to come’ and her upset had ‘nothing to do with politics.’
‘Nothing to do with what’s happened this week,” he told the BBC.
‘It was a personal matter for her.
‘I’m not going to intrude on her privacy by talking to you about that.
‘She will be chancellor by the time this is broadcast; she will be chancellor for a very long time to come.’
But the damage is severe. Bloomberg economist Dan Hanson put the size of her budget black hole at £20 billion.
And the way the markets reacted to her emotional distress, and Starmer’s refusal to back her in the Chamber, underlined the broader costs of the rebellion.
The cost of 10-year bonds spiked 0.16 percentage points. For context, the last time the cost of UK government borrowing soared at this level was after Liz Truss’s mini-budget — an episode from which the former Conservative government never recovered.
The pound dropped sharply against the Aussie and US dollars as well as the Euro.
These are critical indicators in normal times, but additionally meaningful when it comes to Labour because Reeves is considered to be the fiscally responsible bulwark inside the government. Even if she survives for now, she is a diminished figure, skewered by the parliamentary party and barbequed by her boss, so the markets look to be pricing in the loss of her influence, and possibly her remaining in the job.
The blame game is underway. Fingers are being pointed at Reeves, her office, as well as Number 10, Morgan McSweeney, chief aide to Keir Starmer and the prime minister himself.
There is now chatter of Starmer not lasting another year. It is an incredible breakdown between the government's nervous system and the backbench.
It has only been one year since Keir Starmer won his landslide election.
He won just 34 per cent of the vote on the lowest turnout since 2001, but claimed 411 of the Commons' 650 seats.
The size of the majority made for a big headline number, but concealed deep fissures that were always set to threaten the foundations of Starmer’s government, as they did this week.
The first was the shallow nature of the win. The number of very marginal seats — where the margin is 5 per cent of less — rose to 115, up 48 from the 2019 election. The number of very safe seats — where the majority is over 50 per cent — dropped to just five in 2024, down from 37 in 2019.
This goes some way to explaining the jitteriness of so many rebellious MPs who appear to have no respect for Starmer’s political authority, despite him delivering Labour such a historic win.
But Starmer himself is partly to blame for the disintegration of discipline.
He chose to campaign on almost nothing, other than not being a broken and dysfunctional Tory party that had raced through five prime ministers in eight years.
Whilst Starmer is right to say there is a ‘moral imperative’ to fix the broken welfare system, he needed to have been making this case in opposition in order to claim a mandate for the difficult reform.
He, somewhat smugly, campaigned on a promise of ‘change’, but gave almost no details about how he would go about this.
In the end, not being Tory and not being the former radical left-wing leader Jeremy Corbyn was enough.
But there was always going to be a price to pay for campaigning on a small-target strategy.
Without seeking permission from the electorate for the exact nature of the ‘change’ he vowed to deliver, it is now impossible for him to turn to his mutinous MPs and read them the riot act and say: Understand that you got elected as a candidate under my leadership when I promised to carry out this work.
Like Reeves, Starmer is also greatly diminished. He lost control of his party and seemed aloof or indifferent to the public distress of his number two.
The Conservatives have a rare window of opportunity; they can argue that despite all the complaints about the Tories and austerity, only they are the party of fiscal responsibility with the mettle to make tough decisions and see them through.
But after their historic defeat last year, they are a shell of a movement. Ultimately, if Labour fails, it is a gift for Nigel Farage’s upstart party Reform UK, who can say the major two are both kaputt.
After a year of Labour in charge, Reform leads Labour in More in Common’s latest poll by five points on 29 per cent, and the Tories are at 1 per cent. Reform came second in 98 constituencies in the 2024 election, and in 89 of them, it was second to Labour, with the bulk in the North of England – the so-called Red Wall.
Nervous Labour MPs would do well to remember that their brief mark on history could be opening Number 10’s doors to the populists.
This piece was first published by The Nightly.
Makes you appreciate how fortunate we are to have Jim Chalmers and Katy Gallagher in the finance and treasury portfolios.