Why Rachel Reeves Faces Dark Clouds Despite Her Multi-Billion Pound Spending Spree

Labour MPs saw a different side to Rachel Reeves on Wednesday evening.Fresh from delivering her spending review, the chancellor faced a meeting of the Parliamentary Labour Party, telling them to go out and “sell” what she had just announced to voters.“People are only going to know the good news that we set out today if we campaign on it, if we deliver the leaflets, if we speak to people on the doorstep, if we write those pieces for our local papers, that is how people are going to know that it is Labour making these differences,” Reeves told them.So far, so unsurprising. But those present detected a marked change of tone from the chancellor, who has often appeared to have the weight of the world on her shoulders over the past 11 months.“She joked, she laughed and she looked well,” said the MP. “She was like a woman released.”When the winter fuel debacle was raised, Reeves acknowledged that mistakes had been made since Labour won the election.“That shows she gets it,” one backbench MP told HuffPost UK. “She knows where she is in the popularity stakes and there’s no way you don’t feel that personally. She’s not Cruella de Vil. But this felt like a reset moment for her.”Among the jokes, however, there was a nod to the often-fractious negotiations with her Cabinet colleagues as their departmental budgets were set.The last hold-out was home secretary Yvette Cooper, whose refusal to accept the real-terms cuts she was facing eventually led to Reeves taking the highly unusual step of imposing a settlement on her.At the PLP meeting, Reeves admitted to being “peed off” with police chiefs complaining about a lack of cash after receiving a 2.3% increase in their budget.“I don’t think they would have said that without Yvette giving them the nod,” one MP said.For the moment, however, Labour MPs from across the party’s various factions seem pretty pleased with what Reeves announced.Chris Curtis, co-chair of the Labour Growth Group, said: “We were pushing for greater investment in affordable housing, infrastructure, and research and development and we’ve seen major commitments on all three.“These are the foundations of sustainable economic growth, and with them we can start to deliver what the British people rightly expect: rising wages, economic security, and properly funded public services.”Jo White, the MP for Bassetlaw and chair of the Labour Red Wall Group, said the spending review – which included billions for better transport links in the north and Midlands – had been “the starting gun” on the next election.“We welcome that the government is listening to the Red Wall,” she said.Reeves might find her spending spree is a tougher sell across the country, however.A focus group carried out in Coventry after the spending review by the More in Common think-tank offered further proof of the widespread disillusionment there is in the country with politicians.All of those taking part had voted Labour last year, but been unimpressed so far by the party’s time in office.“Growing up when you voted for Labour, you knew what you were voting for,” said Deena. “I think at the moment, they’ve just gone back to blaming things on the Tories and not giving stuff they promised.”On what Reeves had announced, therapy assistant Caroline said: “She just says what she thinks we want to hear. And we do want to hear it. But will we see it? I definitely won’t hold my breath.”Ed Hodgson, More in Common’s associate director of polling and analysis, said: “Behind all the numbers from the spending review, it’s clear from the voters we spoke to in Coventry that they’re running out of patience and want to see real improvements in their day-to-day lives.“That’s going to be the real test of whether the chancellor’s financial calculations, and her belief in UK growth giving her future headroom, can actually pay off politically.” She knows where she is in the popularity stakes and there’s no way you don’t feel that personally. She’s not Cruella de Vil The ink on Reeves’ spending review speech had barely dried before the Office for National Statistics announced on Thursday morning that the UK’s gross domestic product (GDP) shrunk by 0.3% in April.For a government’s whose number one mission is supposedly growing the economy, this was sub-optimal.A senior No.10 aide was sanguine telling HuffPost UK that they had been braced for bad news.“You can overdo the month-to-month stuff,” he said. “The month before growth was up 0.7%. “But we’ve never shied away from the fact that there’s a lot to do on GDP and we always knew that April was going to be tricky.”Critics have dubbed Reeves the “Klarna chancellor”, insisting that the billions of pounds of spending she announced on Wednesday will have to be paid for later, most likely by hiking taxes in the Budget.Reeves, who put up taxes by £40 billion in what was meant to be a once-in-a-parliament move last autumn, has refused to rule out coming back for more this autumn, while also insisting that the spending review was “fully funded”.“We didn’t put up taxes in the autumn for no reason, we had to do it, and the choices we had was either to put up VAT on everyone or ask businesses to pay a bit more,” said one senior government figure.“We don’t relish tax rises, but we need to put the public finances first.”But one Labour insider accused the chancellor of “boxing herself in” by sticking to her fiscal rules, which forbid any borrowing to pay for day-to-day government spending.“It’s their starting position on everything,” the source said. “You can argue that’s the best possible starting point, but equally you can say at some point, shouldn’t your starting point be how do we win that election or deliver the plan for change?”With all the talk of more tax rises, one seasoned observer suggested that Reeves may in fact have something much more radical in mind.“The big unknown, and which will only begin to take shape in 2027, is will this hairshirt being worn now give Rachel a war chest that will allow her to do a big tax cut before the next election?” they said.“Mind you the recent track record or pre-election tax cuts is not great, given Jeremy Hunt did three of them and the Tories still got hammered.”If Labour are to avoid the same fate in 2029, Reeves needs to hope that the spending spree she announced on Wednesday delivers tangible improvements to the lives of ordinary voters – and soon.Related...'Not A Serious Analysis': Reeves' 'Baffling' Spending Review Slammed By Leading EconomistsBlow For Rachel Reeves As UK Economy Shrank By 0.3% After Trump TariffsNick Ferrari Calls Rachel Reeves 'The Klarna Chancellor' After She Splashed The Cash In Spending Review

Comments

Breaking news

Aitken: Glasgow ‘disempowered’ by Spending Review as English regions gain more powers

The Herald

Comments

Breaking news

Aitken: Glasgow ‘disempowered’ by Spending Review as English regions gain more powers

No more Edinburgh Book Festival for me – where did it all go wrong?

Why saving lives at sea is truly a family affair in one Scottish town

When is Trooping the Colour? Date, time and how to watch on TV

Baby ‘thrown from pram’ after woman and children struck by lorry in ‘hit-and-run’

How a teenager tried shooting the Queen during her birthday parade

12 Behind-The-Scenes Secrets You Didn’t Know About Race Across The World

This Sunscreen Is So Good, I Bought 8 Bottles In Japan – Now You Can Buy The UK Version

I Tried The Skin Care Dua Lipa 'Can't Live Without' – My Skin Cleared Up In 7 Days

Death toll in one of India's worst aviation disasters climbs to 270 as search teams find more bodies

Man killed his wife and then microwaved their beloved dog to death

'Seventh circle of hell' death where man burned alive in 'worst execution ever'

BRIAN READE: 'Cruel disaster of Grenfell is warning over powerful dodging responsibility'

M&S hooded parka that gets ‘so many compliments everytime I wear it’ is perfect for rain and sun

Race row as top UK health boss says mum got 'Black service, not an NHS service'

'Seventh circle of hell' death where man burned alive in 'worst execution ever'

WW3 horror as Israel's Iran strike is world war 'blueprint' - missiles, drones and nuclear attacks'

'Bloodthirsty chimp ripped off my face, eyes and hands – I'll never forget one sound'

M&S shoppers given key warning after cyber attack halted website orders for weeks

Royal fans think King Charles made Trooping the Colour 'faux pas'

Man killed his wife and then microwaved their beloved dog to death

See if Red Arrows will fly past your house in 2025 on interactive schedule map

UK abandoned wartime village frozen in time where empty terrace houses sit

Eerie theme park left to rot has dark secret lying in one of its crumbling rides

‘I'm starving myself to death to protect my kids - they shouldn't see my brutal death’

Air India release video hours before fatal cash with shocking four-word message

Amanda Holden’s Wimbledon whites maxi dress ‘clings to all the right places’ and is crease-proof

New Covid Nimbus variant 'with very painful symptom' sees UK hospital cases rise

Madeleine McCann: 'Germans told me they'd charge suspect - now I fear he'll walk free'

Brits told to ditch mayo in tuna sandwiches and add one richer ingredient

Former Deputy Head Claims Shift From Reception To Year 1 In Schools Is 'Criminal' – Here's Why

Why Does Talking About Bugs Make You Feel So Itchy?

Thank You To Sabrina Carpenter For Reminding Everyone That Pop Is Supposed To Be Provocative

Jake Shears: 'It Really Feels Like The World Might Need Scissor Sisters Again'

Key moments from the fifth week of Sean 'Diddy' Combs' sex trafficking trial

Iran retaliates after Israeli strikes targeting its nuclear program and military

The Latest: Iran launches retaliatory strikes on Israel, killing at least 3 people

Tesco's £25 kitten heels 'give £150 designer rivals a run for their money'

Why Trump's military 'birthday' parade is so controversial

Petrol bombs thrown in fifth night of violence in Northern Ireland

Portadown chaos see rioters hurl petrol bombs at police amid 'week of shame'

Warning over hidden danger in compost that rots lungs and kills

DAZN to air every FIFA Club World Cup game for free – here's how to watch live in the UK

Former detective slams authorities and says they 'failed' in Jay Slater inquest

Met Office shares 100 places set for violent thunderstorms TODAY - see full list

British couple's nightmare holiday from hell sparks vow to 'never leave the UK again'

Fifa, the Club World Cup and Saudi Arabia

Global oil prices soar after Israel attacks Iran

Air India’s New Owners Were Trying to Revamp Carrier Before Crash

A Miscalculation by Iran Led to Israeli Strikes’ Extensive Toll, Officials Say

Photos of Marines in combat gear in Los Angeles as protests against immigration raids continue

Millions expected to attend ‘No Kings’ protests during Trump’s military parade

Cities prepare for ‘No Kings’ rallies nationwide as Marines arrive in Los Angeles

Marines temporarily detain man while guarding LA federal building

At least 11 dead and others missing in San Antonio flash flooding

How Israeli strikes dealt a serious blow to Iran's nuclear ambitions

The home of one of the largest catalogs of Black history turns 100 in New York

US military parade has global counterparts in democracies, monarchies and totalitarian regimes

A Border Patrol agent died in 2009. His widow is still fighting a backlogged US program for benefits

Takeaways from AP’s investigation of US death benefits program for public safety officers