The Chancellor defined her brand against a party which struggles to talk about finances
October 30, 2024 6:46 pm(Updated 6:49 pm)
The style was brisk, the pussy bow blouse had echoes of the Margaret Thatcher Powerfrau era – but alas it proved a bit droopy in the heat of the full House of Commons. Possibly the Chancellor had more on her mind than the sustainability of her knots as she delivered Labour’s first Budget in 14 years.
These occasions are the spine of new governments and Rachel Reeves, with a neat auburn bob, was evidently relishing her first truly big day in the limelight after being locked up with Treasury officials for the last few weeks. She gleefully held the battered red box aloft for pictures outside No 11.
There was no return to the tradition of a stiff drink at the despatch box, though many of us will probably discover in the next few days that we need one, as the reality sinks in. The Reeves cocktail, had there been one, would have been a confident-looking affair, served with a large dash of fiscal angostura bitters. There was a stonking £40bn of tax rises (a mega ouch for small and medium businesses), and higher stamp duty for second home owners.
It’s worth remembering that this was also Reeves’ first major political exercise since she forged her way to the front of the Starmer team in Opposition. Few would doubt that there is a better candidate on the front bench: the tone was mainly secure – not too much carping about the wealthy and treading nimbly around the trap of who constitutes “working people”.
She gave a speedy reprise of her logic on raising capital gains tax on shares. Non-doms are now renamed, less exotically, as “residents” – a tax scalpel applied to their immediate finances and family farms, but not the full Leninist raid on mobile capital.
Dealings with the Tory legacy were mentioned with the manner of a new CEO cleaning up an earning mess left by a predecessor who had quit without a leaving party. Lots of “never again will we…” and references to the regretful necessity of cutting parts of the ousted boss’s spending plan. “Many (NHS) buildings have been left in a state of disrepair” might be the metaphor for the shabby state of the nation she wanted to communicate.
Budget Day is also a rare occasion when Prime Ministers are reduced to looking on, delivering nods and smiles in the right place. Something in Reeves’s “get it done” delivery, which rattled along like one of those rare British high-speed trains, suggested that as well as the big fiscal enchilada, this might also prove to be a trial outing for the bigger job – in No10 next door – in the fullness of time.
Reeves hoped her outing as the first female Chancellor could inspire girls across the country. We were reminded that she worked at the Bank of England as an economist, which is her equivalent of Keir’s dad being a toolmaker. It’s a marker which Reeves hopes will define her brand as a smart person in a party which so often fears the financial world and sounds ill at ease talking about it.
Colleagues who note Reeves’s tendency to say “Keir and I” in a bid for dual leadership will have taken note. Does she fancy her chances? For sure. But the probability of that depends on how an ambitious spending programme funded by changing borrowing rules and tax raids fares, when confronted with reality.
To many viewers though, she will have sounded authoritative and the metallic quality to her voice has improved (either by Thatcher-style speech training or just greater ease with the brief). Chancellors all acquire a style – the self-praise of the Gordon Brown years –“Oh yes Madame Speaker!”, the smart-aleck tone of George Osborne: “And we can do more!”
Reeves has more in common with her predecessor Jeremy Hunt, building arguments and then inserting the political scalpel at the end of the list of pain and forfeit: would the Tories “cancel hundreds of projects across the country” by daring to oppose her budgets?
We counted all the right Labour inputs – more teachers (might there be better ones, or just more of the same? More NHS appointments (but would they lead to actual and more successful rates of treatment?) Rishi Sunak, in his swansong appearance, was a revved up as an ex-leader. But how much can he say about tax rises imposed by another party, having swung a fair few around himself under the duress of public finances? The Office of Budgetary Responsibility’s worried take on the growth implications was not met with a round of applause – even if it was equally damning of the Tories’ record.
Reeves pursed her lips at the charge of “broken promise after broken promise”. But her fate and her chances of moving up to the top job one day depend on a massive gamble – that borrowing fuels a rise in prosperity and not simply a debt pile; that once we’ve paid the extra tax for the public services, there are results more people relish than resent.
Today, a new Chancellor has a spotlight to enjoy. But how many of her predecessors become prime ministers? Aside from James Callaghan and Gordon Brown, very few (and in the latter case, not for long). Chancellors need the drive and ambition to take on the toughest job in government – the fundamentals of the economy and who pays for or gains from that. Not a lot of them get thanked for it: but the government’s blueprint for power is now officially the Rachel recipe .
Anne Mcelvoy is host of the Power Play podcast for POLITICO, out Thursday