New economic broom

It was the season of light, it was the season of darkness, it was the spring of hope, it was the winter of despair

And so it begins. The ‘Project Fear’ that Rishi Sunak’s election campaign majored on, the huge amount of tax increases that an incoming Labour Government would rain down upon an unsuspecting, gullible, overly optimistic electorate.

Well, it wasn’t quite that. At least, not yet. But the ground is being readied for it. October 30, the first of the new Government’s Autumn Statements, isn’t going to be pleasant.

Back in the Dark Ages – aka the 1970 and 1980s when I grew up – Labour was known as the party of profligacy. Of throwing money at the situation, in a flurry of Keynesian economic indulgence, paid for by excoriating tax rises.

It was the Tories who took a machete to everything cutting back anything that could be cut, whether public infrastructure spending or benefits, in order to be the party of lower taxation, of letting market forces decide.

Yesterday was a mixture of both. It was a Labour Chancellor, Rachel Reeves, who took the Whitehall red pen and scored through lists of anything and everything that could be cut in order to fill a great big black hole of finance that she says was left by the Tories.

Of course she blames them. It’s the old joke about the two envelopes: one contains a note that says Blame the other guy, the other one a note that says Get two envelopes.

Reeves ditched a load of infrastructure projects from the A27 Arundel bypass and the Stonehenge Tunnel, to the re-opening of railway lines and a load of hospitals, planned but not anywhere near actually being started. She also binned the winter fuel payments for any pensioners not currently receiving benefits. Has she cut that too far? Maybe, though if you’re not going to make it universal, I suppose pension credit is the easiest way of determining eligibility. However, for every sprightly 65-year-old sunning themselves on a cruise round the Med, there’s another two shivering in Margate, too scared to put the heating on, and too proud or unaware, or just above the limit to claim the credit. Swingeing cuts sometimes hurt the ones who need help the most.

That said, there is still enough of the Labour of old in Reeves’ statement for us not to feel too discombobulated – public sector pay is going up: teachers, nurses, NHS workers and others will see pay rises of around 5%, junior doctors of 22% in order to resolve the long-running dispute. It’s not the 35% that the junior doctors’ unions wanted, but it’s a damn sight more than anyone else is getting, and will go a long way to restoring pay to something more morally acceptable for people who, you know, save lives. There are still plenty of people out there – *coughs* –  who are unlikely to get a 10th of that, but I digress. One concern is that other sectors out there will look at the 22% and think ‘I’m having me some of that, and I’ll strike if I don’t get it’. Mick Lynch springs to mind.

It’s going to get a lot more painful. But we knew that. All that furlough money has to be paid for somehow. Maybe the plans unveiled by the deputy prime Minister, Angela Rayner this afternoon (Tuesday) to bring back housebuilding targets for councils, and to use up some of the uglier parts of the green belt will be just what this industry needs to kickstart it, and the economy, and we’ll be in the sunlit uplands before we know it.

Or not.