Starmer's Dilemma: Could Labour's Growth Stagnation Force Chancellor Rachel Reeves Out?
Today's growth figures have once again drawn sharp attention to the Labour government's economic failures. The latest estimate from the Office for National Statistics for January shows zero growth, a stark reminder of the sluggish economic performance under Chancellor Rachel Reeves. While this is just one month's data and subject to revision, the impression of stagnation is unavoidable, especially with higher oil and gas prices threatening to push the economy lower.
The Pressure on Rachel Reeves
For Rachel Reeves, who made growth her rhetorical priority and promised the "highest sustained growth in the G7," these figures are particularly damaging. After twenty months in power, Labour's growth mission has not materialised, and there is little prospect or plan to achieve it. This raises tough questions about democratic accountability: should Reeves consider her position, or should Prime Minister Keir Starmer consider it for her?
Starmer has reportedly wondered if Health Secretary Wes Streeting could better communicate the government's economic message, though that message remains unclear. However, rumours suggest Streeting might be plotting against Starmer and could face dismissal rather than promotion in the next reshuffle.
Potential Replacements and Historical Precedent
Other capable candidates for chancellor include Work and Pensions Secretary Pat McFadden, Defence Secretary John Healey, and Home Secretary Shabana Mahmood. All are seen as politically astute, loyal, and media-savvy, with Mahmood particularly impressive in driving change. But what would be the purpose of such a switch?
Historically, replacing a chancellor rarely leads to electoral success. Since World War II, only Margaret Thatcher achieved this, appointing Nigel Lawson to replace Geoffrey Howe in 1983 before winning the next election. According to Thatcher's biographer Charles Moore, she disliked Howe's quiet demeanour, leading to his move to the Foreign Office. Lawson was a bold tax reformer who built on Thatcher's first-term decisions.
However, no comparable vision exists for any "safe" replacement for Reeves this early in Parliament. The only candidate with an ambitious agenda is Energy Secretary Ed Miliband, author of "Go Big," who regrets not being bolder during his leadership. Yet Starmer has shown no inclination toward reheated Corbynism, making Miliband an unlikely choice.
Starmer's Likely Course of Action
Chances are high that Starmer will stand by Reeves. He recognises that her mistakes are his mistakes, and moving her would be an admission of his own failure. The growth figures highlight this shared responsibility: Labour entered government knowing growth was key to success but had little more than hope to make it happen.
They lacked a concrete plan, such as abolishing stamp duty or launching an emergency housebuilding programme to boost short-term economic activity. While they dropped the £28 billion "green prosperity plan," they retained too much of Miliband's clean-energy economics, failing to cut net zero costs or keep energy prices lower.
The failure of Labour's growth mission is as much Starmer's fault as Reeves's. Sacking her would mirror Liz Truss's dismissal of Kwasi Kwarteng, likely forcing the prime minister's own resignation within days. Thus, Starmer faces a critical juncture: throw caution to the wind or maintain stability, with the economy's future hanging in the balance.
