Rachel Reeves has made quite a big deal out of being the first female Chancellor. It’s slightly odd for a woman born the year Margaret Thatcher became Prime Minister to suggest her elevation shows “our daughters and our granddaughters that they need place no ceiling on their ambitions”. If a woman could only get to the top of the Labour Party, we might really make history.
From the evidence of her conference speech, Reeves has little to offer the nation except an answer to a pub quiz question. Despite the best attempts of a few court poets to suggest Reeves is an ‘Iron Chancellor’ in Gordon Brown’s mold, she strikes me more as Philip Snowdon with a bob: a Labour chancellor with so zealous a commitment to fiscal probity she will end up reviled by her party.
Not that Reeves received much hostility yesterday afternoon. The lamentations of one tender-conscienced Hooray Henry aside, the Chancellor received the rapturous support of her tribe. The general tenor of Labour’s wet weekend in Liverpool might be miserable. But, for now, Reeves enjoys the applause of a party she has doggedly supported since childhood.
Nonetheless, when the Chancellor claimed that “her optimism for Britain burns brighter than ever”, it was hard not to laugh. In the three months since entering Number 11, Reeves has succeeded in painting such a gloomy picture of our economy that consumer and investor confidence has plummeted. The difference between Reeves and a ray of sunshine is not hard to discern.
You wouldn’t guess that inflation had slowed or growth rebounded. Reeves’s Britain is one where the pound will implode unless Deirdre shivers this Christmas and where a £22 billion black hole mysteriously appears just after the unions get a pay rise. Her George H W Bush tribute act has been swapped for talk of ‘difficult’ and ‘painful’ tax hikes, to the surprise of no one but her.
Reeves has kept us waiting for a Budget. Having pledged fealty to the Grand Order of the OBR, sworn by oath to mention Liz Truss once every fifteen minutes, Reeves might value taking her time. But that rather flies in the face of her decision to punt out her fiscal statement as quickly as possible. Perhaps she needs more time to work out how to keep appeasing Ed Miliband off the books.
Without a set piece event outlining more than just cuts, voters know more about Reeves’s wardrobe than her plans. Yesterday was an opportunity for her to correct that. Unfortunately, for both the Labour faithful and Britain’s economy, she offered only the thinnest of thin gruel.
A few million for school breakfast clubs, a Covid fraud snooper, and a few encomiums to stability hardly fill the gaping hole left by the junking of ‘Securonomics’. The Chancellor still has no satisfactory answer to the question challenging this whole government: what is the point of Labour a government if it hasn’t got any money to spend? Except on Sue Gray, obviously.
Reeves demonstrated some self-awareness when she claimed “that not everyone – in this hall, or the country – will agree with every decision I make”. Since the postponing of the winter fuel allowance debate had already been met with a chorus of boos, this was a statement of the obvious. Which Labour member joined up to make poorer pensioners worse off?
She reassured those assembled that there would be “no return to austerity”. She should tell that to her ministers – of whom she has demanded departmental spending restrictions – or the OBR, which is planning on a campaign of cuts and tax hikes stretching long into the future. You won’t be surprised to hear immigration wasn’t mentioned. The human printer must go brrrrr.
Of course, austerity is in the eye of the beholder. One person’s prudence is another’s parsimony; one person’s reckless Tory cuts are another’s responsible management of the public finances. By presenting her efforts at this latter, Reeves hopes to obscure her status as a George Osborne tribute act.
Then again, Reeves must take some form of dark delight in making her job more difficult. Encouraging the take up of pension credit, hikes on capital gains, her colleague’s campaign for rolling blackouts by 2030, a VAT raid on fees that might lose more than it raises: these are all policies that will reduce revenue and remove her freedom for manoeuvre in years to come.
Reeves struggles to enthuse with the paltry sums she is playing with. How many minutes will cancelling a £40 million contract for “Rishi Sunak’s helicopter” fund the NHS for? How quickly will halving the government spending on consultancy get defence to spending to 2.5 per cent? How much better off will pearl-clutching about Covid contracts leave the average voter by 2029?
A new industrial strategy? Not another one. A major international investment summit? Not another one. A “genuine living wage”? Not another one. Her pay rises to the public sector are proving so “meaningful” that the nurses rejected theirs while Reeves was still speaking. They have their asset in Number 11. Why settle for anything under par? She will surely fold.
If Reeves is supposed to be the new ‘Iron Chancellor’, she is already looking rusty. If her Budget bombs as badly as her first effort at a fiscal statement, there will be more chance of her getting the sack than of her ever moving next door in Downing Street. As the faithful become gloomier and the poll trend downward, her penny-pinching will be blamed for holding back Labour’s ambitions.
Even on planning reform – the one area where Labour could have been helpful – efforts have fallen short of rhetoric. This is a government of tinkers and technocrats, poseurs and pygmies, moribund from the moment it entered office. At best, five more years of managed decline; at worst, unprecedented disillusionment with politics, amidst some genuinely terrible policies.
Keir Starmer will follow his Chancellor today by offering “light at the end of this tunnel” – a desperate attempt to convince his party that the hairshirt act will all be worthwhile. Will anyone believe it? Not on the evidence so far available. It would be enough to drive you to drink, if they aren’t intent on banning it.
