There was an obvious question hanging over this afternoon’s Spring Statement — whether the fiscal event might be Rachel Reeves’s last. Defeat in the Gorton and Denton by-election last week demonstrated the extent of Labour’s political problems. Keir Starmer’s leadership appears precarious, perhaps just waiting for bad local election results in May to collapse fully.

As Chancellor, Reeves has been at the centre of this failure. Many of the decisions that have damaged Labour are the responsibility of the Treasury. In her first Budget, changes to the winter fuel allowance and Inheritance Tax provoked public uproar, while raising employer National Insurance Contributions posed a challenge to job creation. On the spending side, she has failed to deliver for the Left. Initial reluctance to remove the child benefit cap has created problems within Labour, while many voters struggle to see improvements in public services.

Starmer and Reeves have not done enough to deliver results that ordinary people notice, while at the same time angering both sides of the political aisle. With Labour now slumping to third place in some polls and leadership speculation rife, the Spring Statement looked like one of the last levers the Government could pull to try to get out of this hole.

The message from Reeves today, however, was more of the same. The Spring Statement was a reiteration, not a pivot. There was no new policy, no changes to taxation or spending. She flexed Office for Budget Responsibility forecasts of faster growth in 2027 and 2028, and of higher-than-anticipated growth in per capita GDP over the course of the next parliament. Reeves also pointed to the prediction that unemployment would fall in the coming years. The plan, the Chancellor argues, is working. It is the voters, one must assume, who are wrong.

Her confidence may be overplayed. Anyone familiar with the OBR knows its forecasts are variable, especially in the medium term. They also rely on the Government’s current spending projections, which point to cuts in the latter half of the parliament. It is easy to put growth ahead of public spending in the hypothetical, and far harder when an election is pending.

Both the forecasts and the statement failed to account for the risks posed by conflict in the Middle East. The US strikes on Iran came too late for the Treasury bean counters, yet they threaten to further disrupt future projections. A continued spike in oil prices will cause a real challenge to the UK economy, where energy costs are already high. Combined with disruption to shipping, it could also trigger further spikes in inflation. These harm the cost of living and mean that public spending doesn’t stretch as far.

The Spring Statement was a rhetorical exercise, not one rooted in policy. The Chancellor rode out to confront her critics, not to adjust her course. The message was clear: the plan is working, and we need more time. Aimed as much at her backbenchers as at voters, she wanted to pull out of the current narrative of a Labour crisis and suggest that better results were on the horizon. The subtext was barely hidden: stability, she suggested, was better than the chaos that had engulfed the Tories.

The question is whether anyone is convinced. Labour’s poll ratings show the current plan isn’t winning over the public. Gorton and Denton confirmed that, and the local elections are likely to hammer it home. Those will come much more quickly and loudly than the OBR’s promises of future growth. Reeves may be proud of the projections, but few in Westminster believe she will be in the Treasury when the real results for next year, or the year after, come in. A statement that celebrated and delivered stability may have missed the last chance to avoid a leadership change.

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John Oxley is a corporate strategist and political commentator. His Substack is Joxley Writes.

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