Some in party worry the shadow Chancellor's current tough line on spending learns the wrong lessons from New Labour
votersSome in party worry the shadow Chancellor’s current tough line on spending learns the wrong lessons from New Labour
With Sir Keir Starmer now presiding over a consistently large lead in the opinion polls and Labour winning safe Tory seats in by-elections from rural Yorkshire to mid-Bedfordshire, it’s no wonder one guest confided the gathering had “a real 1996 vibe” – when Blair and Brown were on the edge of power.
Balls insists that while it was right to change Labour’s image as the tax-and-spend party , while adding efficiency targets and “Public Service Agreements” for each department to tie cash to delivery. At the Institute for Government event, the 11 Labour frontbenchers present – including shadow Health Secretary Wes Streeting – may have squirmed uneasily in their seats as the shadow Chancellor spelled out why fiscal rectitude was not a “right-wing” attribute: “You’ve got to have fiscal discipline, it’s the underpinning of everything else.
Torsten Bell, of the Resolution Foundation, puts his finger on the problem. “Can we invest more while also saving public services and not wanting to raise taxes significantly? That is going to be very hard indeed.” Some in the party also say there are plenty of ways of raising substantial sums from closing multiple tax loopholes – something Treasury officials will already be pencilling in as options for ministers whoever wins the election.
“In my first Budget, I increased the total tax burden on the country by a greater amount than anybody since the war, but it was very popular because I wound up by taking a penny off income tax. I personally never went round ruling out any particular move in any particular tax in advance of my Budget. I made my mind up what was necessary.”, yet Reeves does give herself a bit of wriggle room. “I don’t want the tax burden on working people to rise.
“There are loads of areas where you think the UK tax system really needs a sort of thorough-going look and set of reforms. I think it’ll be really interesting whether Rachel Reeves has big aspirations to go down, not just as the first female chancellor, but as a really significant reforming chancellor, the like of which we probably haven’t really seen since Nigel Lawson,” says Rutter.
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