Why 'Stability, Stability, Stability' will be the theme of Rachel Reeves's first Budget: Chris Burn
It is not often that you hear an interview subject cite “economic stability” as a core passion but that was precisely what then Shadow Chancellor Rachel Reeves did back in 2021 when I spoke to her for this newspaper.
I’ve been looking back over that profile piece as the countdown to her first Budget next week is increasingly characterised by anxiety rather than anticipation, both in the business world and in Labour’s political circles.
At the time of our chat, a point when I was this newspaper’s political editor, Ms Reeves and Keir Starmer were only just drawing level with the Tories in the polls as the Partygate scandal began to play out. They were still very much in reassurance mode that Labour could be trusted with the country’s finances following the big-spending promises of the Corbyn years.
When I asked her about her own political position, Ms Reeves described herself as being on the “centre-left” and said: “I’m a social democrat, my passions really are education and economic stability – creating good jobs and opportunities for people across the country and ensuring when the tide rises, it lifts all boats. Too often, you get economic growth that makes the rich richer and doesn’t help the people in the middle or at the bottom.”
We also discussed her time working at Halifax Bank of Scotland in the late 2000s as the global financial crisis played out and she discussed in some depth how that experience had also influenced her belief in the importance of keeping the nation’s finances on an even keel.
"When economies tumble, it is those on the lowest incomes who suffer most,” she said.
While with any political interview you have to factor in how much of what is being said is down to their party line at the time, it is worth noting these comments came almost a year before Liz Truss and Kwasi Kwarteng delivered their disastrous ‘Mini-Budget’ and inadvertently made economic stability the number one topic in British politics.
But economic stability is a consistent theme that Ms Reeves has returned to again and again. I think it explains a great deal about her approach to this Budget and a seeming willingness to take decisions that upset different sections of voters as well as her political colleagues.
In my view, it is also why the Chancellor has stood her ground on the controversial decision to axe universal winter fuel payments – something that has proved deeply unpopular among many older Labour voters as well as those that back the Conservatives.
But a U-turn would have signalled that even with a large majority the new Government could be pressured into changing confirmed policies and also that the Chancellor could not be taken at her initial word if the political weather was going against her.
Holding firm instead is consistent with the Chancellor’s message that fiscal responsibility is her first priority and it is only on that foundation that growth and prosperity can follow.
There are some initial signs that approach may be paying dividends already. Goldman Sachs is now predicting that UK interest rates may drop to 2.75 per cent next year, a situation which would help facilitate investment in this country – another key pillar of Labour’s economic policy.
So while Ms Reeves also listed education as a political passion back in 2021, expect ‘Stability, stability, stability’ to be the theme of next week’s Budget.
This is the weekly Wednesday column from Chris Burn, business and features editor at The Yorkshire Post. To read his column a day early in our Tuesday business newsletter, sign up for free here.