ANDREW PIERCE reveals the breathtakingly cynical reason why Keir Starmer WON'T sack chancellor Rachel Reeves...yet

Daily Mail​

9 hours ago

As MPs poured out of the Commons after another stormy Prime Minister's Questions this week, the Chancellor Rachel Reeves cut a particularly lonely figure.
With her head bowed, Reeves was exiting the Chamber alone – until one colleague caught up with her to walk loyally by her side.
It was the chairman of the Labour Party, one Ellie Reeves, the Chancellor's younger sister. No other Labour MP, it seems, was willing to be seen associating with the embattled Chancellor.
What a dismal year she has had. Reeves came into office last summer promising to 'unlock private investment', 'fix the foundations of our economy' and deliver 'sustained economic growth'. She has failed on all three counts – and it increasingly shows.
Many Labour MPs commented on the Chancellor's body language as she took her usual place next to Starmer at PMQs. 'She looked broken, like she had been tranquillised,' says one source. 'She is clearly deeply troubled and unhappy.'
There have even been reports – sharply denied by the Treasury – that Reeves spent much of Thursday in floods of tears amid shouting matches with colleagues. 'It's not true: she is resolute,' says one of her allies – a diminishing group these days.
Now the Chancellor's problems are about to get even worse. Keir Starmer 's screeching U-turn over disability benefit cuts means she has to find billions to fill a budget black hole – and comes only weeks after her humiliating £1.25 billion volte-face on winter fuel payments.
With almost 130 Labour MPs joining the revolt over the Welfare Bill, there are now huge questions about the Prime Minister's grip over his party.
Keir Starmer 's screeching U-turn over disability benefit cuts means Reeves has to find billions to fill a budget black hole
But it is the debacle over disability cuts that threatens to destroy the remnants of the Chancellor's political and economic credibility.
Reeves is now at the centre of a full-blown crisis in relations between Downing Street and Labour MPs. The Chancellor – more than any other member of the Cabinet – is being blamed for the shambles.
Some MPs have privately said they 'hate' her. Now the Chancellor's critics within her own party are growing ever louder. Worryingly for Reeves, they include a number of ministers unhappy at her performance.
In the increasingly febrile mood at Westminster, even moderate Labour MPs are now saying Starmer should sack her. If she stays, they reason, she will worsen the PM's poll ratings – languishing at an abysmal 46 per cent in the latest YouGov survey.
But would Starmer have the guts to ditch his Chancellor barely a year after their landslide general election victory? Absolutely not – and the reason why, I can reveal, is breathtakingly cynical.
One senior party figure tells me: 'Number 10 needs her. She is absorbing all the blame for our problems, and therefore diverting it from the PM.
'Whether it's in the rural areas over her decision to bring in inheritance tax for farmers, or with pensioners over winter fuel, it's Rachel's name that comes up on the doorstep every time, not Keir's.
'Keir is an anonymous figure at Parliament. We rarely see him and he's never in the division lobbies, while Rachel is there all the time. She's receiving huge flak from her own colleagues.'
But my source also warned fellow Labour MPs: 'Have we learnt nothing from the Tory years? They went into the last election a shattered force and suffered their worst ever defeat.'
While few MPs expect Reeves to be sacked or even demoted in the short term, the next big test could be the autumn Budget.
Reeves set herself two new fiscal rules in the last Budget: pledging to balance day-to-day spending with tax receipts and to get public debt down as a share of the economy.
Another source says: 'The PM may order her to change the rules to avoid tax rises. It could lead to a showdown. If she refuses, she goes. If she agrees to change them, her last scrap of respectability is gone and she will be a lame duck. If taxes go up, it's hard to see how she could limp on for much longer.'
After the Budget, Labour faces the Welsh Assembly and Scottish Parliament elections in May. Reform are expecting to capture Wales, a traditional Labour stronghold.
A senior government figure says: 'If the local elections are a disaster, Keir will need to blame someone. There'll be yet another 'reset' and I think he'll throw Rachel under a bus if he hasn't already. He will pledge a new direction with a new Chancellor.'
The favourite would be Pat McFadden, the dour Cabinet Office minister. But if Tuesday's vote is dramatically lost – now thought to be unlikely after the rebels won a raft of concessions – Reeves would be in dire trouble, as in fiscal terms the Government would be holed below the waterline.
Reeves' own political hero is Gordon Brown. She will no doubt be aware of his infamous quip that there are two types of Chancellor: those who fail and those who get out just in time.
A mere 11 months after she entered the Treasury, most Labour MPs – to say nothing of the country at large – have already decided which one of those she is.