Rachel Reeves meltdown as Starmer rips plan to shreds. See what’s next | Personal Finance | Finance

When Reeves swept into office just under a year ago, she was full of conviction, pledging that “economic growth is the number one mission of this government”. Her “Plan for Change” would help to fix the NHS, boost policing, hit climate goals and give working families a better future. “We will have succeeded in our mission when working people are better off,” Reeves declared.

That phrase that hasn’t aged well. Instead of the “prosperity, thriving high streets and vibrant British businesses” she promised, we have yet more decline and decay. The economy shrank by 0.3% in April and the Bank of England now says growth will flatline all year.

One forecaster after another has downgraded the UK’s prospects. Trump’s tariffs haven’t helped, but Reeves has done most of the damage.

PM Keir Starmer has been forced to follow her with a dustpan and brush, trying to sweep up the mess she’s left in her wake.

He’s reversing one part of the plan after another. At this rate there will soon be nothing left. No plan, no Reeves.

The list of U-turns is getting ever longer. First it was the winter fuel payment, now disability benefit cuts.

Two more flagship policies may go.

First, Treasury officials are trying to water down the disastrous non-doms tax raid, which will reduce tax revenues rather than increase them.

Second, around 40 rebel Labour MPs are pushing for by a partial retreat on the so-called “tractor tax”, the cruel inheritance tax (IHT) raid on small family farms. Let’s hope they succeed.

If Reeves had an ounce of sense, she’d never have launched that in the first place. Or the equally dim-witted IHT raid on family firms, which as I explain here, will destroy brilliant British businesses like this one. Starmer should rip that one up too, but there’s no sign yet.

Each climbdown creates a fresh hole in the public finances.

It’s not just Reeves in full reverse mode. Starmer has U-turned over grooming gangs and is wobbling on the two-child benefit cap.

Yet Reeves remains at the heart of the storm. She came in talking tough, projecting fiscal discipline and “iron-clad” decision making.

Now her plans are full of holes.

In her first Budget, Reeves vowed to “fix the foundations of our economy, and repair the public finances”.

Another £40billion hole has opened up and spending cuts are off the table. The Labour Party simply won’t wear it.

So taxes must rise again this autumn, even though she previously promised they won’t.

She’s already shifted, saying only that they’ll be “less painful” than before. But even that may not hold.

All that’s left now are her supposedly “non-negotiable” fiscal rules, which “will always be met”. They may have to go too, and take the final shreds of her credibility with them.

The foundations she promised to fix are crumbling. Soon, Reeves will be left as chancellor in name only, reciting robotic pledges to build a stronger Britain while presiding over its slow-motion decline.

And then she’ll be gone. Her grand plans will turn to dust. Remembered only for the damage they did along the way.