July 30, 2024 - 7:00am

It was brutal, ferocious, personal — and effective. Looking out from the dispatch box yesterday afternoon, Rachel Reeves set about trying to dismantle not just the economic record of her opponent, Jeremy Hunt, but his character. The Shadow Chancellor looked shell-shocked.

If the Conservative Party’s reputation for economic management was already on life support, Reeves seemed determined to put it in the grave. The last government “covered up” a £22-billion black hole in the public finances, she said. Note: she was not accusing the party of simply overspending, but of overspending and then hiding this fact from the public. It was a serious charge. “They had exhausted the reserve and they knew that but nobody else did,” she claimed.

In response, Reeves set out the new mantra with which she hopes to be associated: “If we cannot afford it, we cannot do it.” It was, as one commentator noted, “reverse Keynesianism”. This was Reeves playing Margaret Thatcher. As a result, road, rail and hospital building projects were all cancelled. Most eye-catchingly of all, Reeves announced that winter fuel payments would be scrapped for pensioners not in receipt of pension credit, while plans to cap the cost of adult social care were binned. “The inheritance from the previous government is unforgivable,” the Chancellor declared. “They spent like there was no tomorrow.”

Reeves then set about rolling the pitch for a series of tax rises, welfare cuts and austerity measures to come in the Budget, which she announced would take place at the end of October. As Parliamentary performances go, Reeves’s tone of moral indignation was brutally effective. In terms of raw displays of power, it was also a moment of realisation for the Conservative Party that the period of nicey-nicey which followed the general election is well and truly over. This Labour government means business and is prepared to play rough.

The politics of yesterday’s performance are also obvious: get the unpopular stuff out of the way early while you have the political capital to do so. And yet, irrespective of the politics, there was also something desperately disappointing and, actually, boringly conventional about the substance of Reeves’s statement yesterday. Having denounced the record of the last Labour government, there was more than a whiff of early George Osborne about it all. Infrastructure projects to improve Britain’s long-term economic performance were jettisoned in order to balance day-to-day spending. This is exactly the kind of economic short-termism that economists such as Torsten Bell — now a Labour MP — have previously warned about. Britain is a monarchy where the Treasury is sovereign. And never more so than now.

Cancelling the “Dilnot” reforms which would have capped care home bills feels like a dreadful portent of what is to come. After 14 years of Tory governments trying and failing to do anything about the problem, now it looks as if Labour will do the same. The danger for Reeves is that this will become the story of the new government: conserving the status quo, prudently. And that will not be enough.


Tom McTague is UnHerd’s Political Editor. He is the author of Between the Waves: The Hidden History of a Very British Revolution 1945-2016, due to be published in September 2025

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