Rachel Reeves sees herself as an Iron Chancellor. She promised stability and growth. But as Labour opens their first Conference as a Governing party in 15 years, business and consumer confidence is falling.
I first thought something was lacking in Reeves’s judgement in April 2020, during the early Covid pandemic. She wrote to my then boss, Michael Gove – the Minister for the Cabinet Office. Her letter implored government to respond faster and leave “no stone unturned” hunting for PPE. Her missive listed companies ready to contribute. One turned out to be a football agent supposedly offering ventilators. Another a medieval silk bodice manufacturer who claimed to be ready to produce medical-grade gowns. Inevitably, a few months later Reeves complained Government had spent too much too quickly on PPE.
In Opposition, Reeves’s central economic message was the vacuous slogan of ‘Securonomics’. She was also committed to a £28 billion Green spending pledge, since abandoned. It then emerged her book was plagiarised. If she had been an undergraduate she would have been sent down.
One of her first decisions as Chancellor was cutting Winter Fuel Allowance. Treasury mandarins had proposed this to her predecessors. She was the first to agree. The Chancellor wrote that weekend that she had to act to avoid “market confidence” in Britain being “seriously undermined”. Her colleague Lucy Powell expanded this point, arguing the cut was required to stop a “run on the pound”. She rightly received much opprobrium. But Powell was essentially echoing Reeves.
Another early Reeves decision was to hand trade union allies large pay awards without securing commitments to modernisation. The Chancellor talked up planning reform to get Britain building, but the policy actually cuts housing targets in London. She has scheduled an international summit to drum up investment a fortnight before the Budget, meaning attendees will not yet know Britain’s taxation landscape.
Her Government’s Green policies are destroying Scotland’s extractives industry, hampering our energy security, and will require the mass purchase of Chinese equipment. And the rush to clean electricity by 2030 seems to rule out new nuclear.
Levelling Up abandoned. English devolution undermined by cancelling mayoral deals. Spend on hospital improvements now under review. The exascale supercomputer shelved. Funding for ELMS (post-Brexit nature-friendly farming) to be slashed. The drive to improve school standards undermined to appease teaching unions. The last Government’s plans to shrink the Civil Service, drive up productivity, and reduce the welfare bill discarded. It’s hard to think of what the Chancellor is getting right.
Inside her department Reeves asked for her personal donor to be handed a senior Civil Service job. She compounded the error by failing to declare his donation. The Chancellor also seemingly asked for her former Parliamentary staffer to be promoted. Treasury eyebrows have been raised about her lack of judgement.
As Chancellor, it’s hard to discern what her central plan is for the country – does she want to industrialise, or is she happy to accept deindustrialisation and the Green transition? Where does she think productivity growth will come from? If she thinks Tories spent too little on capital, why is she now slashing infrastructure expenditure? If she thinks Tories taxed too much, why is she about to increase business tax?
Reeves may be a champion chess player, but in politics she seems to struggle to see a move ahead. It’s no wonder some in Whitehall ask if she’s up to it.
Henry Newman is a former Special Adviser to Boris Johnson and Michael Gove