Voices: Rachel Reeves is relying on a risky strategy – that may well backfire
Voices: Rachel Reeves is relying on a risky strategy – that may well backfire
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The chancellor’s approach can hardly be considered prudent – especially when it depends so heavily on economic growth, writes John Rentoul. Although Rachel Reeves takes advice from all her predecessors – including George Osborne – she models herself on Gordon Brown the most.
Brown, the UK’s longest-serving chancellor, prided himself on his prudence. “Prudence with a purpose” was one of his slogans andThe Prudence of Mr Gordon Brown was the title of William Keegan’s 2003 book about him, written as its subject prepared himself (prematurely) to move next door to No 10.
But Brown’s prudence was mostly accidental. He did not realise how golden his inheritance from Ken Clarke was. The government accounts were heading into surplus – a rare condition in British economic history in which revenue exceeds spending – but Brown’s achievement was to allow Clarke’s prudence to bear fruit. If you define prudence as refraining from blowing the inheritance on a spending spree, Brown was prudent in his early years.
He didn’t keep it up, though. And by the time he eventually left the Treasury for the top job, the public finances were less well prepared for the shocks to come than they could have been. Reeves doesn’t have the advantage of that generous inheritance. Jeremy Hunt may protest that she has exaggerated the awfulness of the public finances that he bequeathed her, but it is safe to say that he was not heading for a surplus on 4 July. So her task was always going to be harder than Brown’s – and no wonder she has had such a rough reception for her decisions so far.
