Chancellor Rachel Reeves finds herself at the centre of a growing political storm as her Budget decisions threaten to destabilise the Labour government and potentially end Keir Starmer's leadership.
The Original Sin: Unprepared for Power
According to political analysts, the fundamental problem facing this Labour administration is that they were completely unprepared for government. During their time in opposition, Keir Starmer and his team focused overwhelmingly on winning the election rather than developing robust policy positions.
The recruitment of Sue Gray, while generating headlines, proved insufficient preparation for the complexities of governing. This lack of foresight led to what commentators describe as 'yielding hostage after hostage to fortune' - commitments that have now come back to haunt the government.
Tax Promises Come Back to Haunt
The Labour manifesto contained what has been described as a 'messy' wording on tax policy. It stated categorically that 'Labour will not increase taxes on working people', followed by specific pledges not to raise national insurance, income tax rates or VAT.
During the election campaign, both Starmer and Reeves compounded this problem by accusing Rishi Sunak of 'lying' when he suggested Labour would increase taxes. The use of what's become known as 'the l-word' has proven particularly damaging, with social media now circulating clips of these denials alongside the government's subsequent tax decisions.
In her first Budget, Reeves made another fateful commitment, declaring she would not extend the income-tax thresholds freeze inherited from the Conservatives. She explicitly ruled this out for the future, describing it as a tax on working people.
This position proved unsustainable. Following her first Budget, she told the CBI she was 'not coming back with … more taxes', before hastily clarifying that she meant '... on the same scale' as measures already announced.
Leadership Challenge Looms
The political fallout from these decisions has created serious problems for both Reeves and Starmer. When questioned by The Guardian about potential leadership challenges, Reeves downplayed the threat, stating 'I just don't think it is a mainstream thing in the Parliamentary Labour Party'.
However, the mathematics suggest otherwise. Under Labour's rules, changed in 2021 by Starmer's team, 20% of Labour MPs - approximately 81 parliamentarians - need to nominate a challenger to trigger a leadership contest.
With about 30 Labour MPs belonging to the Socialist Campaign Group or sharing similar views, only 51 additional 'soft left' MPs would need to support a challenge. Recent polling by Survation for Labour List indicates that members would prefer Angela Rayner over Starmer by 60% to 40% when undecided voters are excluded.
The situation has become so precarious that some speculate Starmer might be persuaded to stand aside voluntarily, allowing Wes Streeting to contest Rayner for the leadership. This potential manoeuvre has been complicated by apparent tensions within Number 10, including briefings against the Health Secretary.
What began as strategic missteps on tax policy has evolved into an existential threat to the Prime Minister's position. The failure to think and plan ahead, a recurring theme of this government's early months, may ultimately prove fatal to Starmer's leadership ambitions.
