Rachel Reeves is falling into traps (Image: PA)
By anyone’s standards is a busted flush. Her time as Chancellor is up. My fear is that Rachel from Accounts – the name by which she has become known – doesn’t see this and in a desperate bid to save her own skin, she will sell us all down the river. Her badly timed visit to , returning with a shockingly paltry deal, only serves to reinforce that notion.
I’ve noticed a trait in politics – particularly from inexperienced ministers such as Reeves – where one bad decision (in Reeves’ case a number of very bad decisions) sets off a whole series of even worse ones in a desperate attempt to counter the first mistake.
Her first mistake was scrapping the winter fuel allowance for 10 million pensioners, followed soon after by her misjudged,
ideologically driven and tin-eared tax grab of a Budget – particularly the £25billion employers’ National Insurance (NIC) hike which has left businesses reeling, confidence collapsing and the in turmoil. The public sector is also in shock as GPs, police, schools et al have to pay it as well, and already have their hands out asking government for help to cover costs.
The net has been closing in on Reeves. Last week’s economic news was truly dire. Government borrowing reached its highest level since Labour was last in power in 2008, the pound fell to its lowest level in nine months and the FTSE fell to an eight-month low. The markets have lost faith in Reeves and her fiscal rules, along with her promises to not increase taxes or borrow more.
Reeves has panicked, as it seems she didn’t see the enormity of the damage that would be caused by the vast NIC increase. She is now turning to anyone and everyone for help: the CBI, the British Chamber of Commerce… she’s even asking regulators for ideas. And now she is seeking help from China.
Even by the standards of Reeves, this is a terrible decision. Thinking that China will help her and the UK out of a hole is naive in the extreme. The Chinese Government must be licking its lips. Reeves negotiating against China? I know who I have my money on getting the better deal and it isn’t Reeves.
In a further humiliation, she announced that she had drummed up £600million of business there over five years. This doesn’t even scratch the surface of the hole we are in, and is a tiny fraction of the amount of trade that countries such as Peru and Hungary have recently secured from China.
A previous Labour Government in the 1970s had to go cap in hand to the IMF to be bailed out. This socialist government is already heading over to China for the same purpose. This won’t end well.