As Toby Helm and Phillip Inman note in The Observer today:
Labour MPs know there are three short-term options for Reeves. But they also know that all of them would be hugely damaging politically.
One is to raise taxes again at the spring budget. The second is to cut spending by more than planned already in real terms towards the end of this parliament. And the third is to break the “iron-clad” rules, and be damned.
I beg to differ. Reeves has a fourth option. It is to say that everything has changed. The assumptions she and Starmer made last year when planning for government presumed a stable world political, economic and trade order, and that no longer exists. To plan on the basis of assumptions that no longer hold true would, in that case, be absurd, she could say. In the circumstances, she could very quickly explain that she must tear up the fiscal rules she had.
My suggestion is that she could and should do that. Never will she have a better opportunity to undertake a reset with the excuse provided by others—and most particularly the Trump, Vance, and Hegseth trilogy of hate and loathing. Any sane person would realise that this requires a reappraisal. Even Ursula Von der Leyen has done so in the EU. Reeves needs only use the wriggle room Von der Leyen has created, and she is off the hook with just about everything.
This would, however, require three things.
One is political nous. There is none of that around Downing Street.
Second, it would require that we admit that the special relationship is over. There is little chance of that. Fascists are, apparently, our friends now.
Third, it would require that Rachel realise there is more to life than accounts, and as a Professor of Accounting, I am sorry to say that I do not think she appreciates that this is the case.
So, maybe Toby Helm and Phillip Inman are right. Maybe Reeves does only have three options. But that is only because she, Starmer, and their advisers are too dim-witted to realise otherwise.
To paraphrase Keynes, when the world changes, so should the Chancellor. The trouble is, there is no evidence that this Chancellor ever read Keynes.
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Things certainly have changed…… “Events, dear boy, events” as Macmillan famously said when asked what might lead him to change policy.
Whether it needs a change of Chancellor to change policy, I don’t know…. but change it must.
“To improve is to change, so to be perfect is to have changed often.” Churchill house of commons 1925, which is an obvious improvement of the quote of John Henry Newman.
“To live is to change, and to be perfect is to have changed often.”
Agreed
There are always alternatives. Some of them may be unpalatable or embarrassing or worse than the status quo, but they exist.
“He who saves his Country does not violate any Law” Donald J Trump 15 February.
He’s threatening that something else is coming down the line. How much worse it might be is anybody’s guess.
The only defence against the Trump/Musk/Vance/Hegseth criminal syndicate, so far, has been the Judiciary. Congress has checked out; the Democrats have no power there and the Republicans are either on board with this coup or they’re intimidated.
Is the Judiciary about to be neutered.
I wish I could agree with the headline but I don’t – I do not expect change and it will be in the name of trying to be clever and seeing things us ordinary mortals don’t see.
Saving face is what comes into play these days. I cannot see a u-turn – a public one at that – mind you, even Thatcher abandoned hard Neo-liberalism on the quiet after a riot or two and set Heseltine off on one nation Tory mission to save the inner-cities (mind you, even this later began to be swallowed up by get rich quick principles as the market took them over).
But where are the riots? There is instead a quiet riot in the growth of Reform.
Starmer could take the view that Hegseth & Vance caused it all and this is why we have to change but all I see is a 1984 scenario to be honest, the UK being part of an ever-war with Russia, starving and harrying its citizens and young blood into the army perhaps? I was talking to a young Glaswegian on the train home the other night who was struggling to get a job ,and the next call was the armed forces.
You a right about the U.S. though. We need to distance ourselves. The prospect of American immigrants trying to escape their civil war (which I think might happen) is quite daunting.
PSR:
I see no problem with the headline – it says the chancellor ‘should’ change….
‘Will’ the chancellor change is another question altogether.
Anrignaut
Does it matter?
Should?
Will?
Whatever…………it will still be like talking to a brick wall – is my point. Orthodoxy rules. And the orthodoxy – should you need to be reminded – is austerity.
@anrigaut – the headline does not say “the chancellor ‘should’ change….” – it clearly states what you say in your second post “when the world changes, so should the Chancellor” which (to me) is a different meaning.
Dim-witted? Undoubtably. Will she change? Unlikely. And even although she were to be replaced as Chancellor, I doubt very much if her successor would alter matters drastically. That would require a person of independent thinking, of stature and courage, and I’m afraid I don’t see anyone in the present Labour Party who would fit that description.
I think the title of this post suggests a fifth option.
It would be much easier to change the fiscal rules with a new person in charge.
If change DOES take place, then that’s how I think it will happen. My views here are based on what I think is politically likely, not on what would make economic sense.
A new person (Darren Jones) who will not admit to any fundamental change of the theory, who will hang on like grim death to neoliberal economic dogma, but will, with weasel words and an enormous amount of dishonest fudging, start spending outside the current fiscal rules. Because he HAS to.
Where that money is spent will tell us who still owns the government. I predict it will be spent on those who threaten THEIR self interest, and that is not the most vulnerable in our society nor the most economically and socially significant in terms of “workers” best serving the public good.
I predict it will be spent primarily in the private sector, PFI style spending for the NHS , and school buildings,more contracted out elective surgery, more bank nurses, more housing bungs for builders, more concessions for business. It will be presented to us as a “new flexible agile responsiveness” to the needs of “ordinary hard working British families”, whereas it will in fact be a panic response to years of economic stupidity, Fa***e’s poll success and the latest political donor threats.
I can’t see Darren Jones moving on fundamental BoE interest rate or QE/QT bond policy, but I really hope I’m wrong there.
I can’t see him reversing the employers’ NI hikes, but again I’d love to be wrong on that, it would indicate at least he went to Specsavers for a private ear syringing appointment before moving into No.11.
I definitely DON’T see him restoring WFP or ending the 2 child benefit cap. That would be dangerously “socialist”. Please let me be wrong again.
I do see him handing some gov’t money to PRIVATE entities to apply some PTFE tape to the water and sewage network.
Kemi Badenoch’s response to any such changes at PMQs, will be to accuse him of being a Kremlin spendthrift then to ask 6 questions in a row on gender politics.
Pardon my cynicism.
“when the world changes, so should the Chancellor” – indeed she should! But ‘will she seize this opportunity’? is the number one question.
We SHOULD change the Chancellor.
Either the one we’ve got changes, or we change HER for another.
Good idea, we’ll change the Chancellor. How, exactly? An anti democracy coup?
Keep the criticism flowing
As Richard states, everything has changed. This brings opportunities as well as dangers. If we had courageous leadership we could use a security deal to re-engage with the EU, and increase much-needed infrastructure and defence spending (under Reeves ‘securonomics’ badge) without scaring the markets. This could be introduced almost on an emergency ‘wartime’ basis. Tories and Reform would have to swallow it or look unpatriotic. We already know “anything we can do, we can afford”(Keynes). Has Starmer got the bottle? I won’t hold my breath.
I wouldn’t
It might be life threatening