Friday 18 November 2022

What Rachel Reeve should have said to Jeremy Hunt in response to the Budget

 I have to admit that I am very impressed by the Shadow Chancellor Rachel Reeve. She is most definitely a grown up politician, who knows her brief. Responding to a budget is a thankless task. You have little preparation for what is coming, the Chancellor does not share that in advance. You have to listen to someone speak for an hour or so, make notes, then stand up and give a coherant response. If you've done your homework, you probably can guess some of it, but there are always a few rabbits pulled out of the hat. 

I well recall Reeve's look of incredulity at the Kwarteng budget. She was clearly blindsided by a Tory throwing all of the rules of good governence out of the window. I suspect that even she hadn't realised what a car crash it was when she rose to her feet. I suspect that she was slightly less scathing than she should have been (and she was pretty scathing), as she hadn't realised the back of a fag packet nature of the whole mess. The idea that a Chancellor would make up a budget without actually working out the consequences is something no one could have anticipated. 

A couple of months later, she faced Jeremy Hunt. This time she knew she was facing a grown up a politician who understood the magnitude of what he was doing. Reeve was also aware that if Hunt 'did a Kwarteng' it would do untold and possibly irreversable damage to the economy. I doubt she expected a repeat car crash. Sooner or later, I am sure she is expecting to have to undo some of the damage herself, so she'd probably not want another complete balls up, just a politically bad one. 

As for Jeremy Hunt, he had what was in some ways a simple task. Everyone knows the news is bad on the economy. As someone who was not part of the Boris or Truss years, he was to some degree blameless for the mess. His main task was simply to present a budget that didn't spook the markets and cause a mortgae rate hike. So long as he did that, he could to some degree claim a victory. But his boss, Rish! Sunak also clearly imposed three other conditions on Hunt. The first was to not upset the pensioners. That is where the core of the Tory vote is and it would be political suicide to upset them. There was never any doubt in my mind that the 'Triple Lock' would be maintained. The second was to not upset the rich bankers, many of whom keep the Tory party afloat financially. By placing clear blue water between themselves and Labour, they have given the bankers good reason to dig deep into their pockets to bolster the Tory party funds. Make no mistake, this is a massive consideration for the party. The old adage when trying to unravel seemingly untenable behaviour is to "follow the money". If giving the Tory party a million quid saves you ten million in taxes, it is a very sound investment. The final brief Sunak gave Hunt was "Don't upset the missus". We all know of the Tax arrangements of the Prime Ministers wife. Her and her family are big beneficiaries of the non dom tax rules. Mrs Sunak would clearly not be too chuffed if she was shafted. Given her families wealth, she may well ask "What is the point of being married to a Prime Minister if he doesn't look after the family?".

So that was the brief. Sod the rest of us. I will be fair to Mr Hunt. He has not really pandered to the real headbangers in his party. I was pleased that he stuck to his guns on important infrastructure projects, such as HS2 and Northern Rail. His appointment of Patricia Hewett (formerly a senior Labour politician) to assist with reforms in the NHS is clearly sensible and politically astute. My biggest disappointment was that there was nothing in there for small business or the creative sector. When will Conservtaive politicians wake up to the importance to the economy of small businesses. When will they realise that the arts sector brings billions into the economy, delivers huge soft power and makes all of our lives better? They have presided over 12 years where school arts has been cut to the bone, where funding for world leading organisations such as the ENO has been clobbered and the BBC has been forced to cut platforms back for aspiring artists, such as BBC Introducing. What they totally miss is that this is the best investment they could make. One of the strange things that I've noticed in 43 years of running a studio is just how many people who have run bands and left the music industry go on to be very successful in business. What other passtime for 16-21 year olds skills you up in managing people, negotiating contracts, marketing and finacial management. Most make a hash of it, but learn the lessons and take these into life. It was no surprise to me that the most electorally successful PM of modern times, Tony Blair, had been in a band. But these skills are simply not on the radar for this government. 

When Rachel Reeve stood up, the eyes of the world were on her. I thought Hunt presented his budget extremely professionally. Whatever you may think of him or his politics, he's a smooth operator. In Reeve's position, you don't know the micro impacts of the decisions that have been annouinced. That comes out in th wash over a few days. All you can do is critique the general direction of travel that the budget has set. Reeve did a good job of pointing out that this budget was all about undoing the mess her party had imposed on us. But I couldnt help byt wonder if it would have been more effective if she'd stood up and simply said "Congratulations Jeremy. You've done what your boss wanted, you've kept the bankers happy so they will keep funding the Tories, you've kept Mrs Sunak and her family happy by keeping the Non Doms happy, you've unravelled the mess that your party inflicted on the country two months ago to some degree and you've shafted the rest of the country to appease the markets that your own party spooked only two months ago". 

That is the truth of the budget, summed up in less than a hundred words. Despite Hunt's promise that he had a plan to sort the nation out, he has nothing of the sort. All he's done is patched up the door after the horse bolted.

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