Sir Keir is fighting to keep Rachel Reeves to save his own skin

THE wolves of Westminster are in pursuit of Chancellor Rachel Reeves.

Borrowing costs are soaring, growth is at a near standstill, and Ms Reeves has enraged employers, pensioners and farmers.

The Prime Minister this week stamped on questions about whether she would be sacked.

This looked like an act of gallantry but it is tied to his own self-preservation.

Sir sacked his then-shadow chancellor, Anneliese Dodds, in May 2021 and replaced her with Ms Reeves. To move her out of the Treasury would be to admit he made the wrong pick twice.

He cannot afford such an embarrassment, not after he was forced to say goodbye to Sue Gray as his chief of staff. If he lets her go now the country – and the markets – will conclude there is chaos at the top of Government.

This is why his spokesman was wheeled out to say: “He will be working with her in the role of Chancellor for the whole of this Parliament.”

But the pledge that Ms Reeves will stay until the next election is a promise the PM simply cannot make.

Labour went into the election with the self-declared “mission” of securing the “highest sustained growth in the G7”. If economic turmoil continues and it becomes blindingly obvious that Labour will flunk this key goal then the PM will come under intense internal pressure to make a change at the top.

Already, there are whispers of Pat McFadden – the PM’s enforcer – or Health Secretary Wes Streeting as leading contenders should a new Chancellor be needed.

Yes, Labour won a landslide but many MPs sit on tiny majorities. When pensioners are besieged by MPs who have lost their winter fuel payments and employers who are worried about the tax hikes in the Budget, MPs will fear their voters will hand them a P45 the first chance they get.

Labour took Hendon from the by just 15 votes; it won Poole by a mere 18 and North West Cambridgeshire by 39. Labour’s mighty majority is fragile and fury at an unpopular Chancellor could torch its support.

Backing for the Chancellor in Labour ranks will fray further if the soaring cost of Government borrowing forces Ms Reeves to order ministers to find huge savings. The Left will be furious if welfare takes a hit and condemn this as Labour’s own form of austerity; those on the Right will get nervous if defence spending is squeezed and chaos continues to reign in much of the criminal justice system.

Above all, Labour MPs will be terrified if inflation bubbles up and we face a renewed crisis. This week’s increase in oil prices stirred precisely such fears.

The Chancellor can protest that the global economy is volatile and that her policies are not to blame. gives every impression of itching to slap major markets with tariffs, and we should not be surprised that the prospect of international trade wars makes the markets nervous.

But Ms Reeves made the political choice to slap tax on employers. We will soon see whether the increase in national insurance contributions, combined with the increase in the national living wage and plans to expand workers’ rights, dissuades businesses from investing and taking on workers.

Opposition parties already present her as the anti-growth Chancellor. If Labour focus groups find she is increasingly to blame for the party’s toxic polling, keeping her in place will become even more difficult.

There are other reasons why Sir Keir cannot promise she will still be in post until the country goes to the polls again. Though the pair have been allies, prime ministers and chancellors routinely fall out; this is one of the most combustible relationships in politics.

The dilemmas facing the government are so vexing there is huge potential for rows about where to tax and where to spend. It would be a devastating blow to the PM’s own position if one day Ms Reeves hands in her resignation.

For now, the fortunes of Sir Keir and Ms Reeves are tied together. And they quickly need to convince voters they are not piloting Britain towards the rocks.