Firing Reeves will make a bad situation worse

Wednesday 02 July 2025 19:30
| Updated:

Wednesday 02 July 2025 19:31

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This government has made many mistakes but leaving Rachel Reeves will be the largest. While my advice to the ministers remains “I will not start from here” I must realize that the wrong step can make a bad situation worse.

And the situation is bad.

Because workers marked the first full year in the office, the prime minister was a reduced figure, unable to endorse the main laws thanks to the parliamentary party who did not want to find £ 5 billion savings in the welfare Bill of £ 310 billion. This is expected to rise to more than £ 370 billion at the end of this parliament, which puts the pM proposed savings into perspective.

The Chancellor, meanwhile, is in a disaster position. After one year in the office, the score card is clear; Tax rises and growth falls, as well as business confidence and household income. Even if the Welfare Bill is passed by Reeves will still be forced to raise taxes again in the October budget.

Now after that it hasn’t passed, this higher tax loom and weak growth will likely be a norm. Angela Rayner’s ‘leak’ memo ahead of expenditure reviews that help propose various tax increases that can be achieved by the Chancellor to now look like a blueprint.

Members of the Labor Parliament, who are brave by the rebellion this week, openly call for ‘wealth tax’ while experts refer to the council tax, called the Tax Mansion, the threshold of freezing and climbing to bank levies as the most likely solution for the Chancellor fiscal headache. But they are not a solution; They will be a recognition of failure and they will condemn the business, saving and investors.

The bond market is afraid of the post-Reeves world

Remembering all this, why didn’t I call the Chancellor’s Head? Look at the bond market.

The results are thorny when rumors about the fate of the Chancellor took place. In other words, the market takes a dim view of the post-Reeves world. The only reason to get rid of him is to leave the fiscal rules that he set. He might have placed a country on the track to destroy them but at least, for now, he still insisted they were very important.

I have no hope that this government will improve its course and ease the burden business he is wearing, and I fully hope – always hope – that they will add to the burden in October, but if you think bad things now only imagine how worse they are if Starmer recognizes that the Chancellor – and the economic agenda – has failed.