Chancellor Rachel Reeves is navigating a precarious political landscape marked by significant challenges. Her upcoming Budget speech aims to address pressing political and economic objectives. However, the outlook appears grim for Reeves and the Labour Party.
Political and Economic Challenges
Reeves faces dual political goals: securing her position and supporting Prime Minister Keir Starmer’s leadership. Economically, the Chancellor aims to avert a financial crisis while stimulating the economy. Recent polling reflects growing public dissatisfaction.
Polls conducted by Lord Ashcroft reveal alarming sentiments among voters. A staggering 76% believe the Budget will render them worse off, while only 2% anticipate personal benefits. Among Labour supporters, only 8% expect improvements, highlighting discontent within the party. On a broader scale, 11% of voters think the Budget will benefit the country, while 72% foresee negative consequences.
Voter Sentiment and Potential Resignation
According to Opinium, 78% of voters view the Budget as unfair. This sentiment raises questions about Reeves’s longevity in office. Furthermore, 75% of those with an opinion—57% of all voters—believe she should resign. Her approval ratings have dropped to levels not seen since the mid-1970s, intensifying pressure on her leadership.
Leadership Dynamics Within Labour
In the context of Labour’s declining support, challengers for Starmer’s leadership are emerging. Clive Lewis’s potential resignation from his seat could pave the way for Andy Burnham to contest Starmer. Other figures like Angela Rayner, Wes Streeting, Ed Miliband, and Darren Jones are also being mentioned as possible contenders.
Labour’s current polling reflects an unprecedented low, often falling to around 15%. The party is now lagging behind both the Conservatives and the Greens. With the 2026 Scottish and Welsh elections approaching, there are concerns about the party’s viability and Starmer’s future amidst potential electoral failure.
Financial Stability Under Threat
Reeves’s mission to avoid a financial crisis is increasingly tenuous. Previous plans for significant spending increases of £70 billion and tax hikes of £30-40 billion left little room for error. Recent increases in spending have been compounded by disappointing tax revenue results, further exacerbating the fiscal situation.
This week’s Budget may witness additional expenditures of up to £15 billion, exacerbating a financial “black hole” estimated at £30 billion. As Reeves attempts to raise taxes to bridge this gap, concerns grow that revenues will again fall short of expectations.
Economic Indicators and Business Sentiment
Recent data from the CBI highlights deteriorating business sentiment, now approaching levels akin to those seen during the Great Recession. With unemployment at 5%, a figure last seen in 2016, economic stability remains elusive.
As Reeves prepares for a critical Budget announcement, uncertainty looms large. If her proposals are not well-received, it may severely compromise her position as Chancellor. The public and political repercussions could be profound, not only for Reeves but also for the Labour Party as a whole.
