Rachel Reeves can’t win, can she?

[anothervoter]

After days and days of negative press and chatter about income tax going up, complaints on Mumsnet and across the media, today’s reports are that idea might be dropped and now she’s being accused of rattling the markets and making the cost of borrowing increase.

Honestly, genuine question- what can she do?

As far as I'm concerned it would be a win if she resigned

Can you tell me where austerity worked? Anywhere?

Apologies, I haven't read the full thread, but various posters have implied the UK should rejoin the EU.

Would it be that easy? I have the impression that the EU might give the UK a hard time about rejoining. Would the UK be considered as a new applicant?

Germany is a good example of fiscal discipline. It has a brake on spending to get into high debt.

The other end is Greece who suffered a debt crisis after fiscal profligacy, just spending too much and unable to weather the 08 crash.

Rn France is struggling with high debt. We’re close but more hemmed in than anything, there’s no more borrowing ability.

We lack a buffer against another economic shock, the IMF has raised this, ie another pandemic-like event and we would be in trouble as there’s no room to deal with it fiscally.

Fully funded and fully costed is just warm words. The whole edifice is based on forecasts with unrealistic assumptions that have never come to pass. All govts do this.

We needed Austerity for 3 or 4 years, after the GFC but unfortunately it continued.
Now we have so many very expensive things to put right, schools, hospitals roads etc.

Their privatised models didn't really work either, the debacle over water is a prime example.

This country needs investment, skills, infrastructure, it it why i believe we need tax rises, all spending cuts (on public services) do is give us a downward spiral of low growth/productivity and long term decay.

Germany of course has financial discipline, because it can, it has a large manufacturing base and spent next to nothing on defence & based on GDP, takes 38% in tax vs the UKs 35%, using investment in defence now to boost their economy.

We have room to increase taxes for targeted investment NOT to increase welfare.

A well funded healthcare system, helps limit the impact of a pandemic.

She messed up last budget by adding NI to the employers and putting the brakes on the economy. Now no one trusts her, especially businesses. It doesn't help that she has no authority within her own party. She's been caught out lying so many times. Her own back benchers will scupper anything she tries to do. Now good. So no, she can't really win.

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She and pretty much the whole cabinet are not qualified for the job.The benefit system has become a joke.it should be a safety net not a way of life also anybody who is not British should not have access to any benefits including nhs just the same as any other country we have become a country that offers everything for ‘free’ to the whole world.labour think taxing employers and the rich will fix the problems and it will not. The rich can leave far easier than the rest of us and employers will just not employ more staff. I knew Labour would be bad but they are actually embarrassing with their level of incompetence

The economy has grown more than almost any other G7 economy & apparently tax receipts are up & the forecast good enough to avoid an income tax increase - which has been handled badly, what on earth was that speech about???

We had a recession in the back end of 2023, with no business NI increases.

The public and the media seem to have it in for her because of the WFA and Farm IHT.

The wider problem is despite Labours majority, less than a 1/3rd of total electorate voted for them, its was only 33% of people who voted.

There’s still a £20bn to £30bn issue that needs to be resolved.

If you follow the situation Reeves looked into 2p up and 2p down due to a bigger gap, it only raised £6bn so not worth it.

She and Starmer will still have to go against the post ‘24 budget pledge to make that a one off. There’s still more tax needed. It’ll be another lie on top of the “fully funded fully costed” ones.

Yes i agree, though it is a lot better than earlier rumours of a 51billion black hole.

There definitely has to be some action on incomes that do not attract any NI, which was the reason for the 2p cut etc.

For me, the Tariffs situation is justification, i don't see it as a lie, i see it more as another example where they made a "promise" they didn't need too.

Do you believe there should be no tax increases?

No tariffs haven’t had the impact predicted. If Reeves could use that I’m sure she’d try, she won’t as that’s not the case.

On what I’d do, I’d not get in this situation to start with tbh. Labour won’t cut anything as it’s Labour. Given that’s who the electorate voted in we’ll just see the tension between their desire to spend more and the inability to do so.

That political mess is what’s happening atm. Best case is no tax spiral. Worst is higher taxes reducing growth and leading to higher taxes each year until they’re out.

We cannot go back in time & there is a black hole, there was at the time of the last budget, too many things unfunded, not least the NI cut.

Tariffs have had a negative impact, on exports and employment.

The BH either needs filling by spending cuts and or tax rises but it is over the longer term, its not that she has to find 20bn all at once.

I'd like to see cuts in Welfare, mainly focused on getting people off benefits, some restrictions in criteria and some tax increases

Will be interesting to see these revised economic forecasts, they may put your mind at ease?

Well if you want cuts rather than tax hikes Labour are not the party who will do it.

But an increase in taxes often leads to an increase in welfare. We’ve seen it in the last year with unemployment rising due to tax increases on businesses in last year’s budget.

Do you think you can tax your way to prosperity?

The ‘fastest growing economy in the G7’ is risible when you’re talking about a difference of 0.1% or whatever the figure is.

None of the data is good. And I wish the flipping OBR hadn’t been given so much power. Their absolute ineptitude at forecasting anything accurately combined with Reeves obsession with them reporting on the state of our finances every 5 minutes has made everything far more unstable.

September was a contraction. I’m not sure why the messaging around that has been massaged to be a positive.

I think they’re still using data from the start of the year when there was a temporary pre-tariff bump. They seemed to think that was sign the economy was recovering despite all the commentators recognising it for what it was.

Yes I recall the excitement there. When most could see it was a behaviour change and would drop out.

It was a technical recession at the end of 2023, there was still 0.1% growth overall that year.

Things were turning around right at the end of Sunak and Hunt’s time in office- Labour took a sledgehammer to that with their first budget.

Right so 2 quarters of negative growth is now a positive for the Tories.

But a drop in September, caused by the JLR hack (all economists accept this) as it hit suppliers as well, is catastrophic and Labours fault.

The economy since July 2024 has grown a lot more than 0.1%, whether you agree with what Reeves did or not, the UK needed the money raised by those tax increases.

I do not see any sledge hammer, the UK grew 0.7% in Q1 2024, it grew by 0.7% in Q1 2025, very similar growth in Q2 for both years, 0.4% and 0.3% respectively.
We've also seen fantastic UK stock market growth too.

Turning things around? this i do not understand, they'd been in for 14 years, the problems Sunak inherited were of a direct result of his own parties economic policy and much of it, what he did as chancellor.

She has brought it on herself I'm afraid.
I am a natural Tory (although I did not vote for them last time) but I do try to be fair to all parties and judge them by the same criteria and standards.
Labour have been a disaster from the beginning, starting off with the VAT of school fees (a left-wing crowdpleaser with no real benefit) and scrapping the Rwanda scheme (they knew better they thought). Then we had the smug 'sorting out' of the doctors' strike which anyone with sense could see would be a disaster.
Whether you agree with it or not, the WFP and benefits climbdowns were politically disastrous. Now it looks like they are goung to do the same with the two-child benefit cap, which - had it been coupled with income tax rises for workers - would have caused more problems for them.
Sadly, they are proving themselves to be completely inept and utterly out if their depth.
They are finding that being in Government is a lot harder than they thought it would be and just saying things (smash the gangs. Growth etc) is not enough without policies to achieve them.
The inability to take any responsibility for anything, the constant blaming of the last Governement, the rampant hypocrisy and the unbearable superior smugness don't help either.

Please point out where I said it was a positive?

As I’ve already said, the 0.7% growth at the start of 2025 was an artificial bump.

Labour were voted on a manifesto for growth. Where is the growth? All we’re hearing is talk of tax rises. They seem to have forgotten the G word.

Sunak had impossible decisions to make as chancellor during Covid. I would have loved to see another party do measurably better.

Rwanda cost 700m, deported no one, took 3 years and at most would deport 500 per year, even if it could have been made to work, so no deterrent, as 1% chance of being deported is a chance worth taking.

However i do agree with much of your post, just not VAT on School fees and Rwanda.

I agree they very much under estimated the task at hand, i never understood the WFP stuff and the Doctors, well they are now being ridiculous.