Rachel Reeves is not repeating George Osborne-style austerity, according to Simon Wren-Lewis on his Mainly Macro blog today (May 21, 2025).
But is that right? Would it not be more accurate to say that she is following the spirit of Osborne austerity, if not the form?
Professor Wren-Lewis argues that, while Osborne slashed public investment and imposed sweeping departmental cuts during a demand-side recession, Reeves is operating in a different economic context (supply-side stagnation) and following a different fiscal philosophy — one closer to Gordon Brown’s “Golden Rule” than Osborne’s deficit fetishism.
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Wren-Lewis praises Reeves for raising public investment plans to flatline rather than decline (as Osborne did), and for resisting the Conservatives’ trick of setting traps for Labour via implausibly tight post-election spending targets.
He concedes that Reeves has done “much less than I would have liked,” but insists that “it is not because she is following in Osborne’s footsteps.”
But does this really hold up when we look beyond economic theory and consider the political and social reality on the ground?
Buy Cruel Britannia in print here. Buy the Cruel Britannia ebook here. Or just click on the image!
The spirit of austerity lives on
It may be true that Reeves isn’t following Osborne’s form.
But she is unquestionably conforming to the spirit of austerity — a politics of scarcity, of fear of taxation, of appeasing the powerful and punishing the powerless.
For all the rhetorical shifts, the basic outcomes remain disturbingly familiar:
-
Departmental budgets are frozen in real terms, despite the crumbling state of public services. Local councils are going bankrupt, the justice system is in disrepair, and the NHS remains overstretched — and Reeves offers no serious fiscal path to change that.
-
The poorest are still bearing the brunt. Reeves has refused to scrap the two-child benefit cap, one of the most punitive and socially regressive policies left by the Tories. She has shown no inclination to lift Universal Credit rates or ease sanctions. Like her predecessors, she finds it politically easier to extract from the bottom than to challenge the top.
-
No bold tax reform. Wren-Lewis rightly notes that Reeves’s greatest failure is her refusal to raise taxes, particularly on the wealthy. But while he traces this to Labour’s long-standing fears since their 1992 defeat, what matters now is that this fear has paralysed the party. If Reeves won’t tax wealth or raise the top rate of income tax, where does the money come from? The answer, depressingly, is nowhere.
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Tough on the poor, timid with the rich
The blunt reality is that Reeves and her leader, Keir Starmer, have adopted a politics that punches downward.
Out of fear of unsettling the rich — or the media class that defends them — they have decided it is safer to target those least able to fight back.
This isn’t the austerity of George Osborne in name or design.
But it is austerity in function — and, crucially, in consequence.
Reeves may not be cutting spending further, but she is presiding over continued managed decline.
She’s locking in the low expectations set by the last 14 years and treating them as the new baseline.
Prof Wren-Lewis, from an economist’s standpoint, is not wrong to separate Reeves from Osborne.
But politics is not just about macroeconomic frameworks.
It’s about choices, priorities, and courage.
And on all three fronts, Labour is failing to offer anything transformative.
Thanks to incredible supporters, we hit our £50-this-month donation goal with half the month still to go. That means another month of research, reporting, and political truth-telling — made possible by you.
But why stop there? Every extra pound helps power more investigations, more videos, and more impact.
If you haven’t donated yet — or want to chip in again — help us build momentum for the next big target: £75.
If you value fearless political journalism that holds the powerful to account, please chip in today. Even £2 helps keep Vox Political running strong.
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Labour is the school bully of modern politics
If politics were a playground, Labour under Reeves and Starmer would be the school bully — not because it’s strong, but because it picks on the weak while avoiding conflict with those who might fight back.
Their refusal to challenge the rich, to tax unearned wealth, to properly fund social care, housing, or local government, is not just timidity.
It’s complicity in an economic order that continues to reward the wealthy while leaving millions behind.
Labour has chosen caution over conviction.
And while ministers may have ditched Osborne’s branding, they’ve kept his instincts: punish the poor, appease the press, and promise as little as possible.
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Rachel Reeves is not an Osborne-style austerian – but still the school bully
Rachel Reeves is not repeating George Osborne-style austerity, according to Simon Wren-Lewis on his Mainly Macro blog today (May 21, 2025).
But is that right? Would it not be more accurate to say that she is following the spirit of Osborne austerity, if not the form?
Professor Wren-Lewis argues that, while Osborne slashed public investment and imposed sweeping departmental cuts during a demand-side recession, Reeves is operating in a different economic context (supply-side stagnation) and following a different fiscal philosophy — one closer to Gordon Brown’s “Golden Rule” than Osborne’s deficit fetishism.
Thanks to incredible supporters, we hit our £50-this-month donation goal with half the month still to go. That means another month of research, reporting, and political truth-telling — made possible by you.
But why stop there? Every extra pound helps power more investigations, more videos, and more impact.
If you haven’t donated yet — or want to chip in again — help us build momentum for the next big target: £75.
If you value fearless political journalism that holds the powerful to account, please chip in today. Even £2 helps keep Vox Political running strong.
👉 Support us here: https://ko-fi.com/voxpolitical
Wren-Lewis praises Reeves for raising public investment plans to flatline rather than decline (as Osborne did), and for resisting the Conservatives’ trick of setting traps for Labour via implausibly tight post-election spending targets.
He concedes that Reeves has done “much less than I would have liked,” but insists that “it is not because she is following in Osborne’s footsteps.”
But does this really hold up when we look beyond economic theory and consider the political and social reality on the ground?
Buy Cruel Britannia in print here. Buy the Cruel Britannia ebook here. Or just click on the image!
The spirit of austerity lives on
It may be true that Reeves isn’t following Osborne’s form.
But she is unquestionably conforming to the spirit of austerity — a politics of scarcity, of fear of taxation, of appeasing the powerful and punishing the powerless.
For all the rhetorical shifts, the basic outcomes remain disturbingly familiar:
Departmental budgets are frozen in real terms, despite the crumbling state of public services. Local councils are going bankrupt, the justice system is in disrepair, and the NHS remains overstretched — and Reeves offers no serious fiscal path to change that.
The poorest are still bearing the brunt. Reeves has refused to scrap the two-child benefit cap, one of the most punitive and socially regressive policies left by the Tories. She has shown no inclination to lift Universal Credit rates or ease sanctions. Like her predecessors, she finds it politically easier to extract from the bottom than to challenge the top.
No bold tax reform. Wren-Lewis rightly notes that Reeves’s greatest failure is her refusal to raise taxes, particularly on the wealthy. But while he traces this to Labour’s long-standing fears since their 1992 defeat, what matters now is that this fear has paralysed the party. If Reeves won’t tax wealth or raise the top rate of income tax, where does the money come from? The answer, depressingly, is nowhere.
Get my free guide: “10 Political Lies You Were Sold This Decade” — just subscribe to our email list here:
👉 https://voxpoliticalonline.com
Tough on the poor, timid with the rich
The blunt reality is that Reeves and her leader, Keir Starmer, have adopted a politics that punches downward.
Out of fear of unsettling the rich — or the media class that defends them — they have decided it is safer to target those least able to fight back.
This isn’t the austerity of George Osborne in name or design.
But it is austerity in function — and, crucially, in consequence.
Reeves may not be cutting spending further, but she is presiding over continued managed decline.
She’s locking in the low expectations set by the last 14 years and treating them as the new baseline.
Prof Wren-Lewis, from an economist’s standpoint, is not wrong to separate Reeves from Osborne.
But politics is not just about macroeconomic frameworks.
It’s about choices, priorities, and courage.
And on all three fronts, Labour is failing to offer anything transformative.
Thanks to incredible supporters, we hit our £50-this-month donation goal with half the month still to go. That means another month of research, reporting, and political truth-telling — made possible by you.
But why stop there? Every extra pound helps power more investigations, more videos, and more impact.
If you haven’t donated yet — or want to chip in again — help us build momentum for the next big target: £75.
If you value fearless political journalism that holds the powerful to account, please chip in today. Even £2 helps keep Vox Political running strong.
👉 Support us here: https://ko-fi.com/voxpolitical
Labour is the school bully of modern politics
If politics were a playground, Labour under Reeves and Starmer would be the school bully — not because it’s strong, but because it picks on the weak while avoiding conflict with those who might fight back.
Their refusal to challenge the rich, to tax unearned wealth, to properly fund social care, housing, or local government, is not just timidity.
It’s complicity in an economic order that continues to reward the wealthy while leaving millions behind.
Labour has chosen caution over conviction.
And while ministers may have ditched Osborne’s branding, they’ve kept his instincts: punish the poor, appease the press, and promise as little as possible.
Vox Political needs your help!
If you want to support this site
(but don’t want to give your money to advertisers)
you can make a one-off donation here:
Be among the first to know what’s going on! Here are the ways to manage it:
1) Register with us by clicking on ‘Subscribe’ (bottom right of the home page). You can then receive notifications of every new article that is posted here.
2) Follow VP on Twitter @VoxPolitical
3) Like the Facebook page at https://www.facebook.com/VoxPolitical/
Join the Vox Political Facebook page.
4) You could even make Vox Political your homepage at http://voxpoliticalonline.com
5) Follow Vox Political writer Mike Sivier on BlueSky
6) Join the MeWe page at https://mewe.com/p-front/voxpolitical
7) Feel free to comment!
And do share with your family and friends – so they don’t miss out!
If you have appreciated this article, don’t forget to share it using the buttons at the bottom of this page. Politics is about everybody – so let’s try to get everybody involved!
Buy Vox Political books so we can continue
fighting for the facts.
Cruel Britannia is available
in either print or eBook format here:
The Livingstone Presumption is available
in either print or eBook format here:
Health Warning: Government! is now available
in either print or eBook format here:
The first collection, Strong Words and Hard Times,
is still available in either print or eBook format here:
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