Ignorance is no excuse for Labour’s economic failures
John Healey is copying Rachel Reeves’ technique of gaslighting the nation into thinking he had no idea what the bind markets and OBR have been screaming at every fiscal event, says Tom Harwood
It feels like “I Got You Babe” by Sonny and Cher should have been irritatingly on repeat every morning this week. Why? It’s Groundhog Day. Again. I feel like I’ve inhabited Bill Murray’s character in that mid 90s romcom, with one repetitive phrase driving me ever further up the wall.
“We had no idea things would be this bad” seems to be the noise emanating from the Treasury this week. Words to that effect, have now been attributed to both the new Chancellor of the Exchequer and the Prime Minister. Here we go again.
The country didn’t buy it the first time a new Chancellor tried to claim our financial situation was worse than she could have possibly predicted during the General Election campaign of 2024. Had Rachel Reeves forgotten that the victorious Labour general election campaign was largely ran on the allegation that the Conservatives crashed the economy? What did she think that was meant to mean?
Reeves clearly attempted to gaslight the country into thinking tens of billions of pounds in tax rises that the Labour Party conveniently forgot to mention in either their manifesto or any other election communications, was suddenly necessary due to factors of which she was hitherto unaware. Yeah, right.
Playing all the old hits
Everyone saw through it and the Labour Party’s favourability dropped like a stone. Now as we brace ourselves for yet another Budget of terror from the same government with a new frontman, we have a new Chancellor, going back to playing all the old hits.
A “senior Labour official” told the Financial Times this week that the precariousness of Britain’s financial position was somehow not obviously apparent to the men with their hands on the tiller: “I don’t think John Healey knew; I don’t think Andy knew… Until you get the proper briefings you can only know so much. John was not in access talks with the Treasury until it was way too late.”
Are we really supposed to believe that ‘access talks’ were necessary to see what the gilt market has been screaming at us? That confidential briefings were necessary to understand what the OBR has spelled out at every fiscal event? Come to think of it, wasn’t John Healey the very same man who was locked in confidential treasury talks for months over his demands for more MOD spending. Was he, as defence secretary, simply not listening to what the Treasury was saying? Or did he think they were lying?
Now we face extreme borrowing costs, ballooning government spending, and an unwelcome spike in inflation that seems likely to lead to a series of growth-killing interest rate hikes. We find ourselves in a doom spiral, where the only way out is generationally significant spending cuts. We also find ourselves stuck with a Parliament temperamentally allergic to making just such cuts.
The welfare bill continues to balloon, and now the Prime Minister wants to add more size, scope, and spending to government with his social care reforms. A feel-good, popularity-obsessed Prime Minister is just about the last thing the country needs in times like this. What the country is crying out for is a hard-headed politician, willing to be unpopular, willing to make the painful choices to restore sanity to the public finances.
It’s hard to know if our Sonny and Cher government really is blind to the crisis they are presiding over – or simply pretended to ignore it in order to win power off the back of impossible promises. Sadly, whichever of those two possibilities is actually true, I don’t think they got us, babe.