It was a masterclass in conflict resolution. As the blue lights began to flash and sirens blare, my Dad pulled over the hire car onto the hard shoulder. Somewhere between Nice and Marseille, he’d been caught speeding. The gendarmerie got out of his vehicle, walked over to ours and gestured for the driver’s side window to be rolled down.
Then, he began to talk, not unsurprisingly, in French. Seemingly unable to follow, my Dad responded apologetically in English. At which point, the policeman offered a Gallic shrug and walked away. The effort — back-up translators, paperwork — to deal with this infringement was no longer worth it.
I mention this only because my Dad, in fact, speaks fluent French and loves nothing more than to deploy it, whether in France or Café du Marché in Clerkenwell. He just tried on his best dumb and polite and got away with it.
Something that the newly installed chancellor of the exchequer appears to be going for, to less promising effect.
Zut alors!
Amid a terrific long read in the Financial Times yesterday (tl;dr taxes may have to rise just to keep still) one section stood out. The notion that, on entering Nos. 11 and 10, the chancellor and prime minister were somehow taken by surprise at the parlous state of the public finances. The paper quotes one Labour insider, who said:
I don’t think John Healey knew; I don’t think Andy knew. Until you get the proper briefings you can only know so much. John was not in access talks with the Treasury until it was way too late.
This is, to put it kindly, implausible. In lieu of pretending he can’t speak French, we are asked to believe that Healey can neither read nor count. True, until you are installed as chancellor, you don’t have the might of the Treasury machine behind you, with access to all manner of market-sensitive briefing material. But come on.
You don’t need access talks with civil servants or secret modelling to know that the public finances are in a mess, bond yields are uncomfortably high and spending pressures, from an ageing population to climate and defence, are only rising. The Office for Budget Responsibility publishes documents to this effect multiple times a year, as do a range of widely respected think tanks.
What is to be done?
Obviously, this Labour insider in question knows that Healey knows this. And this dumb and polite schtick could be forgiven if it were part of a wider pitch-rolling strategy to raise the broad-based taxes (income tax, national insurance, VAT) that would bring in proper money to plug gaps across the public realm and reassure the markets that the UK government remains capable of doing difficult things.
Indeed, “Things are worse than we thought” is a tried and tested political trick because it converts a choice into an inevitability. We didn’t choose to raise taxes or change policy. Horrible, unexpected circumstances forced us to! But that only works if you actually go on to do the difficult things, which on the big taxes, the government has ruled out. And we’ve been here before, right?
Following the 2024 election, Rachel Reeves did the ‘omg guys, things are worse than we thought’ thing, to understandable eye-rolling from the audience. But did she use it to do politically painful things like raising income tax or did she scramble around for random pots of money, such as farmers’ inheritance tax, which required an awkward U-turn and in any event was never going to raise the sort of sums required?
Just my job, five days a week
I declined to join in with the guffaws when Healey, having resigned as defence secretary weeks earlier over the Treasury’s refusal to commit greater funding towards defence, declined to make the commitment on becoming chancellor. This sort of thing happens all the time.
Spending departments ask for money, the Treasury politely declines; a reshuffle takes place, ministers change jobs, everyone suddenly sees the issue differently. But in this instance, Healey appears to want the political benefit of saying the situation is worse than expected without accepting the political consequences that ought to follow.
If the public finances really are in such a parlous state, then he must raise serious money, make deep cuts to spending or accept the market reaction to doing neither. Being dumb and polite might get you out of a speeding ticket, but it doesn’t wash when your job is to be smart and make unpopular decisions.