RACHEL REEVES is planning to cut public services even more deeply than she had already trailed, according to government officials briefing the press, supposedly a response to the soaring cost of borrowing and the recent fall in the value of the pound.

Reeves has ruled out any increase in government borrowing or tax increases and claims the cuts are necessary because her “fiscal rules” are “non-negotiable” and a “red line” amid concerns that she will be unable to meet the arbitrary debt and spending targets she set herself as Chancellor.

Speaking on Reeves’s behalf, a Treasury spokesperson was explicit: “If we have to choose between raising taxes and cutting spending, we will cut spending.”

The announcement means that Keir Starmer’s government intends to perpetuate the national disgrace to which previous Tory governments subjected our country. The United Nations has repeatedly condemned Britain’s treatment of our poor and vulnerable as a “human catastrophe” and in 2023 the Equality and Human Rights Commission submitted a further report to the UN about continuing policy decisions that were hurting millions.

Yet Reeves herself, during her time with the Bank of England’s structural economic analysis unit, argued that setting fixed rules is not just pointless but counterproductive, because they are never really executable and that either failing to meet them or misleading about whether they are being met or changed would damage the credibility of the institution making them.

She even went so far as to remind her readers that Mervyn King, at the time the governor of the Bank of England, had said that “mechanical policy rules are not credible… No rule could be written down that describes how policy would be set in all possible outcomes. Some discretion is inevitable.”

The idea that Reeves’s rules are “non-negotiable” and must be followed even when circumstances change — for example, a new US president threatening the world with tariffs and sanctions and spooking markets — is nonsensical, and Reeves knows that because she wrote it.

Instead, rather than responding to changed circumstances by adjusting policy, Reeves and the Starmer government appear to be using fiscal “rules,” alongside the claimed “black hole in public finances” as an excuse to force government departments to make even deeper cuts than she had already flagged — which were already deeper than what had been inflicted during 14 years of Tory government. Because the rules are non-negotiable, she says, there’s no other choice.

But Reeves, like every chancellor before her who ever claimed to have made them, has already changed the fiscal rules on the fly — which means, of course, that they’re not really rules. As the Institute for Government noted last November, her Budget marked the ninth time in 16 years that a chancellor had moved the “fiscal rule” goalposts.

None of the changes were those that the public was crying out for — reinstating the Winter Fuel Allowance or removing the two-child benefit cap that has pushed hundreds of thousands of children into completely avoidable poverty, for example, even though Labour’s own research suggests it knows these cuts will lead to deaths of the elderly and wrecked life chances for children. Instead, the chancellor changed the way that government debt and borrowing are targeted and measured. Because she could — there are no “rules” preventing her from doing it.

Reeves continued with her planned cuts — and is now planning to cut public spending even more deeply — even though the Bank of England told her that she had billions more to spend than previously thought, because of government gilts maturing.

She remains determined to take this course despite calls from finance experts to change it, for example Professor Iain Begg of the London School of Economics. Begg urged Reeves to abandon the Tories’ arbitrary rules and said that instead she needed to “learn from her European counterparts when it comes to using public expenditure to advance the government’s [priorities].” Begg has also raised questions about the sense and viability of the debt rules that Reeves claims are “non-negotiable.”

In reality, such fiscal rules are a self-imposed straitjacket on the ability of the government to use public spending — whether financed by taxes, increased borrowing or simply the creation of additional money, which is always an option for a nation with a sovereign currency — to drive economic change and fund the infrastructure and investment that are essential to transforming the British economy, let alone eliminating poverty and raising living standards.

By continuing not just to submit to, but to advocate these fiscal rules and to insist that they cannot be changed, even though she has already changed them, Reeves is validating and perpetuating the clearly ideological austerity imposed by the Tories, the very austerity that caused the damage that Reeves and Starmer’s Labour campaigned against during the election on a promise to reverse.

Writing last month, political economist Richard Murphy wrote that Reeves’s “fixation” on her “rules,” particularly “on the government’s supposed financial position rather than the state of the economy around it” is “compounding the [economic] downturn that was already happening for three reasons: people do not have enough money to spend; the money that they do have is being used to pay high mortgage interest and on price-gouging bills for essential utilities; and that by perpetuating the reality that “only the wealthy are being rewarded” she is creating a confidence “doom spiral” that means people spend less of what little spare cash they have.

But the damage caused by Reeves’s fixation on rules that even she cannot really believe are required or helpful goes far beyond headlines on the overall economy. It is lethal for many. A 2022 study by the University of Glasgow linked austerity to more than 335,000 excess deaths in the UK across a period of just eight years, from 2012 to 2019.

A 2020 report by the University College London Institute of Health Equity showed a marked reduction in average life expectancy for both men and women and an even greater fall in “healthy life expectancy,” a departure from decades of consistent increases, in addition to and driven by an drastic rise in poor physical and mental health.

Reeves’s obsession with fiscal “rules that are not rules” threatens the life, health and living standards of millions as well as the economic health of the nation. If she is not to be remembered as the Labour chancellor who inflicted more damage to ordinary people and the economy than the Tories, she must urgently use the full range of tools at her disposal — including a wealth tax and other taxes on the richest individuals and companies, and the creation of money as necessary — and throw off the imaginary shackles she insists she and the whole country must wear.

With the Chancellor’s policy of austerity, in all but name, Rachel Reeves is not the saviour we need — she’s a continuation of a tragic legacy. We must urgently act in the interest of ordinary people for transformational change.

Claudia Webbe is the former member of Parliament for Leicester East (2019-24). You can follow her at www.facebook.com/claudiaforLE and twitter.com/ClaudiaWebbe.