The inheritance section of Rachel Reeves’ first speech as Chancellor had more than an echo of George Osborne’s in 2010. No CFO wants to start at the top of the mountain, all will have it that the mountain is there’s to climb. Reeves claimed that the Conservatives had thrown away £140bn of value from the British economy and that she’d had an extra £48bn to spend – if Britain continued to grow at pre 2010 rates. We have the Treasury to thank for the numbers but I think the note found in the drawer in 2010 was more effective. Governments that run out of ideas, tend to run out of money which is why we see change.
She’s chosen three themes going forward
- Stability – she isn’t going to annoy the Bank of England or Office of Budget Responsibility, she is going to stick to her pledges not to put up the “major” taxes. The manifesto is for keeping.
- Investment. Mark Carney has completed his taskforce report , the results are in and we’ll be hearing more on this very shortly
- Reform. The bulk of the speech was committed to a full frontal assault on nimbyism to get plans approved and houses , energy infrastructure done. There was more than a swipe at regulators and even a mention of the regulatory graveyard.
Shovels in the ground
Frustrated project managers can now go to their regional mayor and ask for their gripes to be escalated to Angela Rayner and Rachel Reeves who will personally review the merits of each one and act as dyno-rod in clearing the pipeline. The idea is to get shovels in the ground by the end of the year , something I hear a lot about in our offices where E Truell & Co are looking to get on with a £900m project in the Port of Tyne. I imagine that many other project teams will greet the announcement with a similar mixture of hope and scepticism.
But few would disagree that the default position on most new developments, whether to do with housing, or windfarms or any other major infrastructure development has to be switched back to “yes”.
An unremarked upon conclusion from the last five years is that while most local decisions not to proceed with projects have met with local approval, the national mood has turned against the lack of progress suggesting that in the collective back yard, we would back Reeves.
And the Chancellor made it clear that local opposition could and would be ignored where the general good was thought to be served. So brown and grey field sites are unlikely to be left alone to ensure the view of those with mansions on the hill.
Someone said on the radio this morning that the Government was still in its honeymoon period. The honeymoon period is generally taken as the first 100 days and as I write this administration hasn’t even made 100 hours. Reeves has come out fighting and the punches, judging by this first speech , are going to land. The tone of the Treasury is probably even more important than the glad-handing of the Prime Minister as he sets off across Britain and today across the Atlantic.
The Treasury is the driver of the change we want to see in other departments, most notably for this blog, in the DWP. I will write later this morning about encouraging noises coming from the Pensions Regulator which suggests that it will not be shackled by its inheritance, will look to stabilise pensions by reforming some of the bad practice we have adopted in recent years. Reeves made the link explicitly yesterday as picked up by Tom
Line from Rachel Reeves’ speech this morning: “And we will turn our attention to the pensions system, to drive investment in homegrown businesses and deliver greater returns to pension savers.”
— Tom McPhail (@PensionsMonkey) July 8, 2024
In terms of what we need to get back our pension culture, the full on attack on planning blight outlined by Chancellor Reeves yesterday, can’t come a moment too soon.
One to watch
