It seems that Rachel Reeves is determined to get as much wrong as she possibly can in her role as Chancellor of the Exchequer. News of two new gaffes in the making is emerging today, both in the FT.<\/p>\n
In the first such story, that paper reports that Reeves<\/a> is looking at using a private finance initiative (PFI) approach to funding a \u00a39 billion new road scheme tat will create a new Thames crossing.<\/p>\n Four questions very obviously arise. One is to ask why we need new road schemes but cannot afford green investment. The failure to address the economic reality we actually face demands answers.<\/p>\n Second, the reason why London gets priority yet again has to be asked. Has Reeves heard of the world outside the M25, even as a Leeds MP?<\/p>\n Third, there is the obvious point to be made that if the City can find \u00a39bn to fund this PFI scheme, it could just as readily find \u00a39bn to deposit with the government to do it.<\/p>\n Fourth, as I pointed out yesterday<\/a>, the government does not actually need to borrow funds to do a scheme like this. The decision to issue gilts to cover deficits is a purely political one. They can as readily be covered by taking more National Savings and Investments deposits. Or they could not be covered at all: the Bank of England could cover the funding. But what is not required is easily the most expensive and risky option for the government, which is a private-sector partnership deal where the cost of funding alone will be considerably in excess of what the government itself would pay.<\/p>\n We have to presume more disasters of this sort are in the making.<\/p>\n Then there is Rachel Reeves' other gaffe in the making to consider, which more than demonstrates she had learned nothing at all from the debacles of the Gordon Brown era. The FT is reporting that<\/a>:<\/p>\n Reeves, speaking on the margins of a trip to New York last week, said: \u201cWe are pushing the regulators to demonstrate that they are taking seriously the competitiveness of our financial services sector.<\/p>\n \u201cOne of the commitments is to go through the rule book and tear up rules that are unnecessary or duplicative and we\u2019re determined to do that,\u201d she added.<\/p><\/blockquote>\n In particular, the Treasury, clearly with political approval, is questioning whether a new consumer compensation scheme for those impacted by consumer banking fraud should go ahead this October because it might reduce the competitiveness of the City. In other words, the cost of bank failure is to be borne by the victim in the Treasury view, presumably endorsed by Reeves, and not by those whose failings let it happen. This is so reminiscent of the worst of Brown\u2019s \u2018light touch regulation\u2019 that I have horrible feelings of d\u00e9j\u00e0 vu.<\/p>\n I was told by many before the election, when I warned of the danger that Reeves represented, that I was being overly harsh and even unfair. In office, I was assured, she would show her true colours. Now I can report that she is doing that, and those colours are at least as bad, or even worse than I imagined they might be. It seems that she is intent on repeating all the mistakes that Gordon Brown made.<\/p>\n This is going to end in tears.<\/p>\n","protected":false},"excerpt":{"rendered":"