Rachel Reeves has failed on her number one mission – but who will replace her?.VA
Economic growth has stalled under her Chancellorship
Rachel Reeves has been one of the most ineffectual chancellors ever, says Martyn Brown (Image: Getty)
Rachel Reeves said growth was her “number one mission”. She has failed. New GDP figures show that the economy continues to flatline, cementing her legacy as one of the most ineffectual chancellors the country has ever seen. The grim data also re-confirms why she will follow Keir Starmer out of Downing Street when Andy Burnham takes over on Monday. Two years of higher taxes have choked the economy.
But Mr Burnham has signalled he wants even more taxes to pay for more benefits. Sir Keir and Ms Reeves may be on their way out the door, but the problem hasn’t gone away, and it may well get worse. Whoever the new Labour leader chooses as his chancellor, they will face a Herculean task to turn the nation’s economic fortunes around.
Andy Burnham faces a tricky time getting the economy moving (Image: Getty)
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Shabana Mahmood looks likely to be the next chancellor (Image: Thomas Krych/ZUMA Press Wire/Shutterstock)
The fallout from the Middle East conflict will continue to bite for the rest of this year, especially with soaring energy costs as we head towards winter.
Inflation remains stubbornly above where it should be, punishing hard-pressed consumers, while unemployment must be brought down.
Welfare continues to balloon, and Britons are staring down the barrel of more tax rises when the new chancellor delivers his or her first Budget in the autumn.
Mr Burnham has also refused to rule out imposing a “wealth tax” as leader, admitting he might “ask for a little more”.
So who will be the next inhabitant of No 11 and will they be any good?
Burnham’s government-in-waiting is already in chaos over this, as he continues to dither over whether to appoint Ed Miliband or Shabana Mahmood to the key role.
A bitter briefing war has erupted in Westminster following reports that Energy Secretary Mr Miliband’s dream of taking charge at the Treasury is set to be shattered.
Home Secretary Ms Mahmood has now emerged as the favourite for the job, with one ally of Mr Burnham claiming she is “nailed down as chancellor”.
But with just days until Mr Burnham enters Downing Street, he has still not made up his mind about an appointment that will set the tone for his government.
Ed Miliband’s dream of being chancellor could be shattered (Image: Wiktor Szymanowicz/Future Publishing via Getty Images)
Friends of Foreign Secretary Yvette Cooper are still pushing her for the role, underlining her experience as a Treasury minister in the last Labour government.
Mr Miliband, a former adviser to Gordon Brown in the Treasury, has long been seen as a favourite for the job, and for months has been working with Mr Burnham on his economic plans for government.
But the prospect of his taking charge at the Treasury after introducing economically damaging green policies in his current role has triggered a ferocious backlash that has united business, trade unions and Blairite Labour MPs.
Sharon Graham, general secretary of the powerful Unite union, has warned Burnham that Mr Miliband’s obsession with net zero would be a “noose around the neck” of job creation.
A Bloomberg survey of investors has found just 5% support installing the former Labour leader as chancellor.
Ms Mahmood fared only slightly better, with 11% support. Former health secretary Wes Streeting was the frontrunner, with the backing of more than 30% of investors, but he has fallen out of favour in the Labour Party.
Tory leader Kemi Badenoch summed it up succinctly, saying: “We are heading for chaos with Labour obsessing about who they can tax to pay for more benefits. It doesn’t matter who is in charge – the problem is the Labour Party.”
