Voices: Rachel Reeves is heading for the brick wall of an emergency Budget
Voices: Rachel Reeves is heading for the brick wall of an emergency Budget
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The chancellor has only herself to blame for failing to give herself any escape routes from humiliation, writes John Rentoul. It was the phrase “non-negotiable” that rattled historians’ nerves. “The fiscal rules laid out in the Budget are non-negotiable,” chancellor Rachel Reeves said when she visited a British bicycle shop in Beijing, China today (Saturday).
The same phrase had been used earlier in the week by Darren Jones, her deputy, in the House of Commons, and before that by a Treasury spokesperson, which is when it first set alarm bells ringing. This is a mistake well known to historians of British politics: being overly emphatic in an attempt to reassure the markets. A classic case study is John Major’s refusal to consider devaluing the pound in September 1992: “The soft option, the devaluer’s option, the inflationary option, in my judgment, that would be a betrayal of our future at this moment, and I tell you categorically that is not the government’s policy.” Six days later, it became the government’s policy.
Major never recovered from that humiliation. Most prime ministers and chancellors learned from that experience not to be too categorical in closing off options and escape routes that they might need if events or markets turn against them. Until Reeves, who has repeatedly made the mistake of boxing herself in. It may have been understandable for her to say in opposition that she had “no plans” to raise taxes, and she might have gotten away with raising taxes if she had been a little more adept at choosing which taxes to raise and which spending to cut.
