How the spectre of Liz Truss’ disastrous budget looms over the Labour Government - David Blunkett

Most incoming governments have a ‘honeymoon period’ when the media, and the world generally, give them a bit of slack. Not so in 2024.

This is not wholly the fault of commentators and pundits finding themselves short of juicy bones to chew on following the defeat of the Conservatives. Certainly, the media – both traditional and (so called) social – have had a field day in terms of entertainment from the political sphere over the last few years.

Resignations, for a variety of unedifying reasons, were accompanied by major political upheavals, not least, the 49 days of Liz Truss as Prime Minister following Boris Johnson's departure.

All this has a read-over into 2024, and must be taken into account by a new government committed to an Ethics and Integrity Commission. Difficult as it is, when you have been throwing stones at glass houses, you have to be whiter than white.

Consequently, some of that upheaval is coming back to haunt the new government. Having been fed on a diet of salaciousness, and sometimes trivial, but eye-catching, questionable decisions, those reporting on politics have, in one way or another, jumped on every political misstep since July 5.

Sue Gray stepping down as Keir Starmer’s Chief of Staff and the subsequent reshuffle of those around him, was just the latest in the new Government adjusting to the realities of being in charge rather than being in Opposition.

In fact, it has always been that the public expect more from Labour politicians than they do from the Tories.

It shouldn’t be like that, but it is just how it is. If you appear to be ‘holier than thou’, and you are against values which espouse making money and promoting the individual over the common good and wellbeing of the community, you’re bound to be judged harshly.

Historically, there was no register of interests for MPs. Winston Churchill received a personal loan to restore Chartwell which was never repaid to the lenders.

But the most significant legacy, in my view, from the last few turbulent years (black holes in the finances apart) is the ‘mini budget’ of September 2022.

For it seems, to me, that the spectre of Liz Truss hangs over decision-making in the Treasury today and the balance between ‘stability and growth’.

During the General Election, it was ‘growth’ that was uppermost in the minds of Keir Starmer and Rachel Reeves. By the time we had reached the Labour Party Conference, three weeks ago, the banners and the speeches proclaimed ‘stability’ as the key imperative.

Not that this is unimportant for businesses, investors and for Britain’s standing with the financial markets. It is, however, the key balance which matters.

Whatever I think of Liz Truss and her erstwhile Chancellor, Kwasi Kwarteng, they really did believe they were ‘going for growth’, albeit that it turned out to be ‘going for bust’.

Now, we can see the pendulum swing heavily the other way. That Treasury ‘orthodoxy’, dismissed too lightly back in the autumn of 2022, has now reasserted itself with a vengeance.

As throughout the last hundred years, the orthodox view has been that short-term pressures must take precedence over long-term and sustained investment, and that even ‘long-term’ is measured in four or five years rather than the 10, 15 or 20 years which would have a logical and sustainable impact. The recent announcement of a 25-year programme for carbon capture and storage is a welcome exception.

As we approach the budget on October 30, it's worth recalling what happened when the coalition government took office in 2010. Forward-looking programmes such as Sure Start, investing in a child and their parents from the moment of birth, were dismantled.

The Child Trust Fund, which would have given youngsters a nest egg when they became adults, balancing out the gross inequality between those with capital and those without, was cancelled.

Longitudinal studies looking back at the impact for those who did benefit have been overwhelmingly favourable. But short-term cuts and ‘in year’ savings, were seen as more important than future outcomes.

It is exactly 100 years since the first Labour Chancellor, Philip Snowdon, moved into Number 11 Downing Street. He had an impossible task in a minority government, which was only ever expected to last months. However, in a snapshot of things to come, he embraced traditional Treasury ideas then, and from his return to government in 1929, more vigorously than his Tory predecessors.

Let us pray that the temporary blip which has affected thinking, and which constitutes the Truss legacy, has run its course. If it hasn't, then I fear for the long-term consequences of our country, and not just the waning popularity of my party.

David Blunkett is a Labour Party politician, and served as the MP for Sheffield Brightside and Hillsborough.