Starmer and Reeves Just Got Humiliated – The Mess They’ve Left Behind Is Barely Believable
Keir Starmer and Rachel Reeves have left behind a political and economic record that is now being subjected to an unusually harsh verdict. Their defenders can point to individual achievements, but the broader question is much harder to answer: did Britain actually become stronger during their time in government?
A recent assessment from investment bank Panmure Liberum has provided ammunition for their critics, concluding that it was difficult to argue that the UK economy was in a better position than it had been when Labour entered office in July 2024. The bank criticised what it described as a fixation on policies that had weakened competitiveness, particularly in areas such as energy and housing.
That is a deeply uncomfortable conclusion for a government whose central economic promise was to deliver growth.
Starmer and Reeves repeatedly presented economic growth as the foundation for everything else they wanted to achieve. Higher productivity and stronger investment were supposed to create more tax revenue, improve living standards and give the Government the resources needed to repair Britain’s public services.
Instead, their time in office became dominated by difficult fiscal choices, tax increases, political reversals and persistent arguments over whether the economy was actually improving.
The irony is that the latest economic data do not show a country on the verge of collapse. Britain’s services sector unexpectedly strengthened in August, with the S&P Global Flash Services PMI reaching a six-month high of 52.8. Consumer confidence also improved, while the economy is expected to grow modestly during the third quarter.
That makes the political argument more complicated.
Starmer and Reeves did not leave behind an economic wasteland. But neither did they achieve the transformation they promised.
The real problem was the gap between expectation and reality.
When Labour entered government, voters had been promised a decade of national renewal. The party presented itself as competent, economically responsible and capable of breaking Britain out of its pattern of weak growth.
Reeves, in particular, made fiscal credibility a central part of her identity as Chancellor. Her message was that Labour would be disciplined with public money while creating the conditions for long-term investment.
But the Government’s economic record became increasingly difficult to communicate.
Taxes rose. Businesses complained about rising costs. Households continued to feel pressure from food and energy prices. Public services remained under enormous strain.
And then came the political problem that every government fears: people stopped believing that the sacrifices were producing results.
The contrast between the Government’s rhetoric and the public’s experience became increasingly damaging.
Starmer insisted that Britain was moving in the right direction. Reeves defended her economic record by arguing that the country had “beaten the odds” and that fiscal credibility had been restored.
But political opponents did not have to prove that everything was going wrong.
They only had to persuade voters that things were not improving quickly enough.
That distinction matters.
A government can survive bad economic conditions if voters believe ministers are competent and have a credible plan. It becomes much more difficult when voters believe that the Government itself is contributing to the problem.
Housing provides one example.
Labour made housebuilding a major part of its growth strategy, promising to build 1.5 million homes during the Parliament. Yet critics argued that policy uncertainty and planning problems continued to hold back construction. Panmure Liberum specifically criticised the Government’s record on housing, arguing that policy choices had created additional barriers to construction.
Energy created another major contradiction.
Labour promised that Britain would become a clean-energy superpower while also arguing that the transition would ultimately reduce household bills. But critics questioned whether restricting new North Sea oil and gas investment could undermine energy security and discourage private investment.
This is not an argument against renewable energy.
It is an argument about the transition.
Britain still needs reliable energy while it builds new low-carbon capacity. If governments move too quickly without ensuring sufficient supply, consumers can end up paying the price.
That became particularly relevant as global energy markets were hit by international instability.
Reeves and Starmer were then forced to introduce measures designed to shield households from rising costs. The Government postponed planned fuel-duty increases and introduced a package including free bus travel for children during August.
Those measures may have provided useful short-term assistance.
But they also exposed the weakness of relying on government intervention to compensate for wider economic pressures.
The deeper problem was fiscal.
Britain’s public finances remain extremely stretched. Government debt reached about £2.98 trillion in July 2026, equivalent to roughly 94 per cent of GDP. At the same time, the Government recorded an unexpected £1.8 billion deficit in July, with spending growth exceeding receipts.
That is the inheritance now confronting Andy Burnham and Chancellor John Healey.
It would be unfair to attribute every one of these problems to Starmer and Reeves. They inherited high debt, weak productivity, expensive public services and years of economic underperformance.
But that defence can only go so far.
Governments are elected precisely because voters expect them to change the trajectory.
The uncomfortable question is whether Starmer and Reeves changed it enough.
Their supporters can point to improvements in some economic indicators, including stronger productivity estimates emerging from revised data. A recent analysis from the Centre for Economic Performance suggested that productivity may have been growing considerably faster than previously believed, meaning some of the pessimism surrounding Reeves’s economic record may have been based on flawed labour-market statistics.
That is significant.
It suggests that the story is not simply one of economic failure.
But it also highlights another problem: the Government failed to persuade the public of its successes.
Politics is not merely about statistical performance. It is about whether voters can see the improvement.
If wages do not feel higher, housing remains unaffordable and public services remain difficult to access, telling people that the underlying numbers are improving is unlikely to be enough.
This was one of Starmer’s biggest weaknesses.
He promised competence and stability, but his government increasingly became associated with political turbulence. Internal disagreements, unpopular policies and repeated attempts to reset the Government’s message created an impression of uncertainty.
Reeves faced her own credibility problems.
Her commitment to fiscal rules meant she was repeatedly forced to defend difficult decisions. Tax increases became a central feature of the Government’s economic strategy, while ministers struggled to reconcile spending promises with limited fiscal headroom.
The result was a vicious political cycle.
The Government needed more revenue.
Higher taxes risked weakening growth.
Weak growth made it harder to raise revenue.
And weaker public finances created pressure for yet more difficult decisions.
That is the mess Burnham now inherits.
Yet there is another important lesson in Starmer and Reeves’s experience.
A government cannot simply tax its way to prosperity.
Nor can it spend its way there.
Long-term growth requires businesses to invest, workers to become more productive and infrastructure to support economic activity. It requires affordable energy, a functioning planning system and a tax regime that encourages investment rather than discouraging it.
This is where Burnham’s approach could differ — or repeat the same mistakes.
The new Prime Minister has made regional economic growth a central part of his agenda. His “Number 10 North” initiative is designed to give regions greater influence over economic policy and reduce Britain’s dependence on decision-making in Westminster.
That could eventually prove transformative.
But decentralisation alone will not solve Britain’s productivity problem.
If Burnham wants to succeed where Starmer and Reeves struggled, he will need to demonstrate that his policies actually increase investment, productivity and household incomes rather than simply moving government spending from one part of the country to another.
There is also a warning in the public finances.
The July deficit was £1.8 billion, while the cumulative deficit for the financial year had reached £56.7 billion — around £2.3 billion more than the Office for Budget Responsibility had forecast.
At the same time, the Government faces pressure to spend more on defence, infrastructure and cost-of-living support.
That leaves Burnham with an extraordinarily narrow path.
He cannot simply continue every spending commitment inherited from Labour’s previous administration.
But cutting too aggressively could damage public services and undermine his political support.
The coming Budget will therefore be a major test.
Starmer and Reeves can argue that they inherited a difficult situation and that some of their decisions were necessary to restore fiscal credibility.
Their critics will answer that voters were promised something much more ambitious: not simply stabilisation, but growth.
And that is ultimately why the criticism of their legacy is so powerful.
The charge is not that they failed to solve every problem.
It is that after promising to change Britain’s economic direction, they left behind many of the same structural weaknesses they had pledged to fix.
That verdict may eventually prove too harsh. Recent economic data show resilience, and revised productivity figures suggest the underlying picture may be better than earlier statistics indicated.
But politics is judged by outcomes as well as intentions.
Starmer and Reeves wanted to be remembered as the leaders who restored economic credibility and set Britain on a stronger path.
Instead, their legacy is now being fiercely contested.
For Burnham, that creates both a warning and an opportunity.
He can blame his predecessors for the problems he inherited.
Or he can demonstrate that his government has learned from their mistakes.
If he chooses the first option, the cycle will continue.
If he chooses the second, the humiliation suffered by Starmer and Reeves could become the lesson that ultimately helps his own government succeed.
The next few months will show which path he takes.