Keir Starmer is reportedly considering removing Rachel Reeves as Chancellor in a major government reshuffle to address Labour’s declining popularity. The Prime Minister is said to be looking at replacing Reeves with Home Secretary Yvette Cooper in an effort to boost the country’s economic outlook.
As part of the shake-up, Starmer-loyalist Pat McFadden, who currently serves as Chancellor of the Duchy of Lancaster, could be moved to the Home Office to tackle the ongoing immigration crisis. Defence Secretary John Healey is also at risk of being replaced due to ongoing disputes over defence spending. Luke Pollard is being considered as a potential replacement at the Ministry of Defence, while former Royal Marine Alistair Carns is tipped for a defence role.
Insiders suggest an “active process” is underway as Starmer decides the best time and strategy for making these changes, with a reshuffle likely to take place in the spring. A Whitehall source noted that the government has faced a difficult first six months, and poll numbers reflect the need for a new direction.
Adding to speculation, there are also discussions about bringing David Miliband back into a government role. Miliband, the former Foreign Secretary, is reportedly being considered as a replacement for Peter Mandelson as President of the Global Counsel. He was also previously on the shortlist to become the UK’s ambassador to the United States, though the role was ultimately given to Mandelson.
Rachel Reeves has been under increasing pressure since what has been described as her “Halloween Budget horror show.” Her policies have faced strong backlash, particularly her decision to scrap the Winter Fuel Payment for pensioners and introduce a 20% inheritance tax on farmers and family businesses.
Her increase in national insurance for employers has also sparked concerns about rising unemployment, with some economists warning that the UK economy is at risk of entering a recession. The government’s spending watchdog, the Office for Budget Responsibility (OBR), is set to release its economic and fiscal forecast on March 26, and if the outlook is negative, Reeves may be forced to cut departmental spending further—something that could cause more division within the Cabinet.
Labour has positioned economic growth as its key promise to voters, but recent struggles, including a flatlining economy and failure to address immigration concerns, have contributed to declining support.
This was further highlighted by a recent Sky News/YouGov poll, which showed that Nigel Farage’s Reform UK has overtaken both Labour and the Conservatives for the first time. Reform now leads with 25%, Labour has fallen to 24%, and the Tories are in third place with 21%. The Liberal Democrats sit at 14%, while the Greens are just below 10%.
This is a significant drop from Labour’s commanding position in July, when they won the general election with 35% of the vote.
Starmer’s personal popularity has also taken a hit, with his net favourability rating sinking to -36, lower than both Nigel Farage (-27) and Kemi Badenoch (-29).
As pressure mounts, Starmer’s potential reshuffle could be his attempt to regain control and rebuild confidence in his leadership. However, whether these changes will be enough to reverse Labour’s declining fortunes remains to be seen.
