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Arguably the general election’s defining phrase was coined, not by one of the prime ministerial contenders or their insurgent rivals, but by Institute for Fiscal Studies (IFS) chief Paul Johnson. Throughout the campaign, Johnson accused both the Conservative and Labour parties of peddling a self-serving “conspiracy of silence”, over the scale of the economic and fiscal challenge awaiting the next administration.
Rishi Sunak and his likely successor, Keir Starmer, were said to be shunning unpalatable trade-offs, consciously refusing to level with the public about the choices they plan to make. The criticism featured most prominently after the Tory and Labour manifesto launches. Johnson’s reasoning was simple: the state of the public finances meant that both parties would need either need to raise taxes by more than outlined, implement spending cuts, or borrow more and be content for debt to rise for longer.
In the end, the manifestos’ exclusions, silences and half-measure commitments spoke volumes about the UK parties’ political anxieties — lest the contenders stand accused either of continuity austerity or Corbyn-esque tax rises. Both the Conservative and Labour campaigns, Johnson affirmed, stood culpable for the election’s dismal economic debate: Sunak wanted to disguise the state’s ills, and Starmer his bitter remedies. (The election result would suggest the former failed and the latter succeeded). But the burden of criticism was shouldered by Starmer first and foremost, relative certainly to the imminently irrelevant Sunak.
After all, Johnson insisted that there was more at stake here, in refusing to address fiscal reality, than the “books’” precarious balancing act. At this most opportune juncture, Starmer was shirking the responsibility to forge a broad consensus in favour of addressing the state’s underlying malaise. Fiscal delusion, Johnson implied, would inspire political disillusion in the long-run — with the ostensibly victorious conspirator set to pay dearly, in time, for under-handed tax hikes.
Still, behind Labour’s veil of silence, the party was coming to terms with its inheritance with intensifying horror. Starmer’s chief of staff, former Whitehall supremo Sue Gray, was reported months before the election to have compiled a “sh*t list” of various blazing departmental bin fires Labour would be responsible for hosing upon entering office. Publicly, of course, Starmer sought to slight Sunak’s economic record by highlighting the dire fiscal situation — using it, as well, to justify the thinner elements of his manifesto.
In this regard, Conservative spokespeople charged that Labour was being far from open about its economic agenda for government. Throughout the campaign, the party argued vociferously Starmer would wean covert tax rises into his fiscal plans by opening “the books” and dishonestly declaring the situation “even worse than we thought”. This prospect was heightened after Labour’s Nick Thomas-Symonds suggested in an interview with Times Radio, in no uncertain terms, that Labour could discover the public finances are “even worse” than expected upon entering government. “Oh dear, oh dear”, a dismayed Paul Johnson reacted.
That said, Rachel Reeves also appeared to rule out this possibility in an interview with the Financial Times. “We’ve got the OBR now,” the shadow chancellor noted, referring to the UK’s fiscal watchdog. “We know things are in a pretty bad state”, she said. “You don’t need to win an election to find that out.”
In sum, a combination of Reeves’ comments, Labour’s tax and spend plans, the government’s fiscal rules and the state of the national finances had backed Labour into a corner. As Starmer wandered into No 10 Downing Street, something needed to break.
Ultimately, the primary feature of a political Omertà — propped up by rival actors — is that it only exists as long as the political interests of said actors remain aligned. Starmer’s victory and Sunak’s defeat, in short, have utterly shattered the fiscal “conspiracy of silence”.
In her inaugural speech as chancellor, Reeves noted that the new government was inheriting “the worst set of circumstances since the Second World War”; it’s a fact, she stated, Labour had “repeatedly warned” of during the campaign. “What I have seen in the past 72 hours has only confirmed that.”
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But over time, with more “books” presumably perused, Labour’s rhetoric escalated. In turn, the party’s scrutiny has shifted beyond the Treasury’s depleted coffers. The prisons crisis is “worse than thought”, Starmer warned in his first week in office. On Tuesday, home secretary Yvette Cooper revealed the now-scrapped Rwanda scheme cost the taxpayer £700 million in total — far more than her predecessors had stated. At prime minister’s questions on Wednesday, Starmer claimed that the government is facing “a more severe crisis than we thought as we go through the books”, with “failure absolutely everywhere”. Finally, setting out Labour’s clean energy plans on Thursday, the prime minister told reporters that ministers are “finding more mess” every single day.
Labour’s crescendoing rhetoric is set to culminate with a speech from Rachel Reeves on Monday, pinpointing a £20 billion “black hole” in the public finances. That figure, the result of a Whitehall-wide audit of shortfalls in funding plans, follows weeks in which ministers have scoured their departments for concealed schemes and unrevealed liabilities. “This is beginning to lift the lid on exactly what they did”, a Labour source told the Financial Times of Reeves’ address. Many, Conservatives especially, expect the speech to pave the way for tax rises later this year.
There are a few explanations for the rate and intensity with which Labour has shattered the fiscal “conspiracy of silence”. First, there is the raw politics: over the past few weeks, ministers have been honing a narrative of Conservative mal-governance — and during a period when the vanquished party languishes in the electoral doldrums no less, far too busy navel-gazing and wound-attending to muster a fight back. Simultaneously, popular recollections of the last government’s failings are — by nature of the passing of time — stronger now than they ever will be. Reeves’ £20 billion figure, Labour hopes, will, (1), crystallise public feeling in favour of short-term fiscal fixes; and, (2), lock the Conservatives out of power for a decade or more.
Labour also faces a second, joint imperative: managing expectations in the country and the parliamentary party. Research from Thinks Insight and Strategy has found that nearly two-thirds of people (62 per cent) believe that even if the Starmer administration is effective “it will take a year or two before we start seeing improvement”. By foregrounding Labour’s dismal inheritance, therefore, Starmer intends to buy more time — and do so during a period of post-election political engagement, when the public just might listen. Moreover, polling conducted prior to the election suggested the public largely expects the next government to raise taxes. An Ipsos poll conducted for the FT in May showed 56 per cent anticipate Labour will raise taxes. It’s not an overwhelming consensus, but the figure suggests tax hikes are, to some extent at least, already priced in to voter expectations.
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Meanwhile, the Labour rebellion over the two-child benefit cap this week underlines that some within the party are restless for policy change and quick fixes, (discontent with universal credit limit spreads far wider than the seven suspended rebels). Still, abolishing the two-child benefits cap would cost an estimated £3 billion, money Starmer stresses the government doesn’t have. In raising the spectre of his bleak fiscal inheritance, therefore, Starmer plans to shape expectations of what can be enacted in the medium-term. Accordingly, Labour’s condemnation of their opponent’s record is not merely politically viable, but in many senses necessary in forging popular and parliamentary consent for the actions Starmer intends to take over the coming months and years.
Starmer then, is following his obvious political incentives; but his Conservative opponents are nonetheless furious.
Shadow chancellor Jeremy Hunt, for one, accused Labour of peddling plain “nonsense” on Friday. Responding to reports of Reeves’ upcoming speech, he labelled trailed claims as “nothing but a fabrication”.“The books have been wide open since the OBR was set up 14 years ago”, he clamoured.
But Hunt’s righteous indignation is revealing, above all, of the Conservative Party’s sudden, stark impotence. Following Reeves’ “black hole” speech, Labour may well go on to raise taxes as the headline measure of an upcoming fiscal event; in fact, that would seem the probable course of action. But this doesn’t mean the Conservatives will win any political credit for their thoughtful foretelling. The outgoing Rishi Sunak, simply, is not going to win the argument that his party handed over a glowing inheritance that now faces ruin from tax-raising ideologues.
Moreover, the case Reeves will prosecute on Monday will be about far more than just balancing the books and her iron fidelity to Labour’s fiscal rules. Far more potently, the shadow chancellor will cast her Conservative opponents, deprived of office mere weeks ago, as reckless cowboys who played political games with the nation’s financial stability — ideologues who plundered Treasury coffers in the short-term, while scheduling austere restraint in future years to game the government’s fiscal rules.
In this way, Labour will not just dodge the fiscal “trap” left by Hunt, but weave his depletion of the nation’s “fiscal headroom” into a broader narrative of Tory mismanagement and mendacious earth-salting.
During the election, Labour did not seek to win a mandate for fiscal tightening — that particular debate, Starmer resolved, was fraught with danger. But today, in government, the rules — both fiscal and political — are entirely Labour’s to reframe and game. Denying Hunt’s fiscal trickery, Reeves wants the Conservatives to own both their failures and any future tax hikes.
This isn’t to say Labour is avoiding risks with this line of argument. While tax hikes generally could well be sold to a public that expects them, the specific measures beg far more controversial questions. During the election, Labour ruled out touching income tax, national insurance, corporation or VAT. Reeves, of course, may already have his revenue-raising measures in mind — having repeatedly refused to rule out changing council tax or raising Capital Gains Tax hikes in the campaign. But can the chancellor construct a complete package, whatever the rhetorical framing, that commands widespread popular consent?
And if the Conservatives are ill-placed to benefit from the likely political furore over “Starmer’s broken promises” — a charge Labour will face over the coming weeks — where will the political energy flow? If Starmer does track towards tax rises, however the process is styled, Labour will need to guard fiercely against a public backlash. That, for now, explains the emphasis on Conservative mismanagement. But any resultant disillusion risks empowering actors to the Tories’ populist right.
Josh Self is Editor of Politics.co.uk, follow him on X/Twitter here.
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