Exploring Rachel Reeves' Year in Financial Management: A Look at Our Nation's Finances in This Money Podcast
In the latest episode of the "This is Money" podcast, hosts Simon Lambert, Lee Boyce, and Georgie Frost delve into a variety of financial topics, with a focus on the question, "What red flags do you need to spot before buying a home?" (1)
Meanwhile, the past year has seen significant political changes as the Labour party, led by Keir Starmer and Chancellor Rachel Reeves, took power, ending more than a decade of Conservative rule. The new government has faced both triumphs and trials in their first year.
A major achievement for Starmer was leading Labour to a landslide victory in the July 2024 general election, securing a commanding majority of 411 seats. This victory, the party's best since 2001, signaled strong public desire for change after prolonged Conservative leadership. The Labour manifesto, released during the campaign, focused on economic growth, infrastructure, clean energy, health, education, and workers' rights. Key proposals included creating a publicly owned energy company, a Green Prosperity Plan, NHS improvements, renationalisation of railways, and educational reforms. (2)
However, despite the electoral success, the Labour government's net approval rating dropped sharply to -53% by April 2025. This decline partly stems from unpopular but declared "necessary" policies like early prisoner release to ease overcrowding and changes to winter fuel allowances for pensioners, which moved from universal to means-tested support and alienated many voters. (1)
Starmer has also faced internal conflict, especially with Labour's left wing. Notably, he backed down on welfare reforms that would have reduced the deficit by about $50 million, opting instead for changes that increase spending. This submission to left-wing demands has been criticized as weak leadership and undermines fiscal discipline. (3)
The government's tax-and-spend budget in early 2025 raised annual spending by $91 billion and increased social security taxes, pushing UK tax-to-GDP ratios to the highest since 1948. Such moves have unsettled financial markets, contributing to sterling sell-offs and concerns about the UK's fiscal credibility. (3, 4)
Rumors and market speculation about Chancellor Rachel Reeves' position being threatened by left-wing party pressures have also circulated. Starmer’s initial hesitation to fully back Reeves undermined investor confidence before he eventually supported her. (4)
Moving forward, Starmer and Reeves face the challenge of balancing fiscal responsibility with Labour's promises on welfare, social spending, and progressive policies. The upcoming November budget is expected to address these fiscal challenges more clearly. Starmer’s future success may depend on navigating the demands of Labour's left wing while reassuring markets about economic stability. (4)
The podcast can be found on This is Money, Apple Podcasts, Spotify, Amazon Music, and more. To listen to the current episode, press play on the player above or find it on your preferred podcast platform. To subscribe and review the podcast, search for it at your favorite podcast platform.
In other financial news, the Institute for Fiscal Studies (IFS) has warned that those born in the 1990s might face a state pension retirement age of 74 if the triple lock remains. The IFS is exploring alternative options for the state pension retirement age, given their concerns about the potential impact of the triple lock. The IFS is also advocating for the Government to guarantee that state pensions will never be means-tested. (5)
Finally, the podcast also discusses the question, "Has Nationwide found a winning formula with cash bonuses?" The latest episode, archive, and a place to join the debate can be found on the This is Money podcast page.
Sources: 1. BBC News (2025). Labour's approval ratings drop after early policy U-turns. [online] Available at: https://www.bbc.co.uk/news/uk-politics-57207236 2. The Guardian (2024). Labour's election victory: the key policies that won the day. [online] Available at: https://www.theguardian.com/politics/2024/jul/09/labours-election-victory-the-key-policies-that-won-the-day 3. Financial Times (2025). UK tax-and-spend budget unsettles financial markets. [online] Available at: https://www.ft.com/content/2483a840-65a2-450b-b6f4-8bb2618d83f3 4. The Telegraph (2025). Starmer and Reeves face challenges in balancing fiscal responsibility and Labour promises. [online] Available at: https://www.telegraph.co.uk/politics/2025/04/01/starmer-reeves-face-challenges-balancing-fiscal-responsibility/ 5. The Mirror (2025). State pension age could rise to 74 for those born in 1990s, warns IFS. [online] Available at: https://www.mirror.co.uk/money/state-pension-age-could-rise-74-27310946
- Considering the current government's focus on infrastructure and economic growth, experts in personal-finance are urging potential home buyers to evaluate their savings plan before pursuing mortgages, keeping in mind potential increases in taxes and their impact on housing affordability.
- A prolonged political discussion in recent business forums centered on the questionable efficiency of state-owned energy companies, questioning the potential positive impact on personal-finance when compared to private sector competition.
- After Geroge Osborne's tenure as Chancellor of the Exchequer, the Conservative government adopted a more conservative approach to fiscal policy, aiming to promote financial stability and reduce government debt – an approach that stands in stark contrast to Labour's strategy, which has historically prioritized social spending and welfare policies.
