Over the weekend, it was reported that Keir Starmer is considering sacking Rachel Reeves to save his premiership in the event of widespread losses in the upcoming local elections. The move may be too little too late for the Prime Minister, but the real criticism should not be that he is getting rid of his chancellor. It is that Starmer should have removed her months ago.

When Starmer reshuffled his Cabinet in September, No. 10 began proceedings by briefing that Reeves would not be relieved of her duties. The argument to justify this move was that the “markets” demanded the Chancellor stay in her position, as investors wanted stability.

The argument has been repeated so often that it has become conventional wisdom. The Chancellor, we are told, is indispensable, but this claim does not stand up to scrutiny. The whims of faceless financiers should not be directing any British government, let alone a Labour one. When Andy Burnham said last year that Britain should not be “in hock” to the bond markets, he was broadly correct.

Underlying this truth, it is a myth to claim that prime ministers cannot change their chancellors. This impression has been informed by recent political memory, where the most stable premierships also maintained their chancellors. Gordon Brown served as Tony Blair’s only chancellor, and George Osborne served as David Cameron’s only chancellor. Yet Blair and Cameron kept their chancellors in place largely for political reasons, not because they believed that markets wouldn’t tolerate a change.

Earlier prime ministers, however, changed their chancellors in order to strengthen the political direction of their economic program. Hugh Dalton’s 1947 resignation from Clement Attlee’s government is often attributed to his carelessness in leaking fiscal details a few minutes before his Budget speech. This was, in reality, more of a pretext for Attlee to swap in Stafford Cripps, whom the Labour PM believed would be more able to sustain the economic program of private austerity to fund public investment.

In 1967, Harold Wilson replaced his chancellor Jim Callaghan following the devaluation crisis. Callaghan had pledged that he would not devalue the pound; but when financiers started to attack the pound through foreign currency exchanges, his position became untenable. Callaghan’s successor, Roy Jenkins, was seen as a successful chancellor, so much so that had he wanted the premiership in 1968, it was probably his for the taking. The wily Wilson persuaded Jenkins to hold his fire, telling him that he would not stay leader for “too long”. Wilson remained party leader for another eight years, by which time Jenkins’s flame had burned out.

Prime ministers can and do replace their chancellors, especially when the political and economic strategy tied to them is failing. Through these examples, it’s clear that Starmer should have removed Reeves long ago. She has shown little political nous in the role, while her fiscal rigidity and devotion to economic orthodoxy have not delivered the growth and economic revival that the country desperately needs. Starmer had his chance back in September, when he reshuffled the Cabinet. He could have removed Reeves — and if he wanted to make a “safe” replacement of her, he could have made Yvette Cooper chancellor.

Instead, No. 10 chose to prioritize the preference of “the markets” over its own political survival. In typical fashion, Starmer found solace in “rules” of political operation rather than considering how “breaking” those rules might actually make things better for him, his government, and the country.

If Starmer decides now that Reeves should go, then it would be for all the wrong reasons. But he should not be criticised for the idea that prime ministers cannot change chancellors. He should be criticised for having believed that he could not.

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Richard Johnson is a Senior Lecturer in Politics at Queen Mary University of London.

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