It's not irresponsible when we do it

Rachel Reeves holding a football

Here’s a good political rule: don’t attack your opponent for calling for something you know you’re about to do.

You might think this rule sounds pretty basic. You’re right. It is. But at the moment the Tories keep breaking it. Honestly, it’s a bit weird.

In theory, Budgets and Autumn Statements are kept secret until the moment the Chancellor stands up in the Commons and delivers them. In practice, chunks of them are leaked and briefed and hinted at weeks in advance. We already know a fair amount about what’s going to be in this year’s Autumn Statement, because the people in charge of writing it keep telling us. And among the measures that look most likely to be in it are business tax cuts, and specifically the extension of the “full expensing” capital allowance regime, initially announced in the 2023 Budget as a temporary measure expiring in 2026, but now set to be extended. This isn’t really a secret. Business groups have been calling for an extension of full expensing, and a couple of weeks ago the Financial Times reported that it was likely to happen.

I’m writing this in advance of the Autumn Statement, but now the Financial Times is reporting with even more certainty that full expensing will be extended or made permanent. It would be quite a shock at this point if it isn’t.

One person who will welcome the announcement, assuming it comes, is Shadow Chancellor Rachel Reeves, who has also said recently that she would like to see full expensing made permanent.

So what did the Tories say about Reeves’ agreement with them that full expensing is a good idea and ought to be extended if possible? They said - I paraphrase, but only a little - that it shows she’s an economically illiterate idiot.

The policy is one of the components of a Conservative claim, made last Monday, that Labour has called for an additional £47 billion of borrowing compared to the Government’s plans - borrowing that is incompatible with the long-term economic decisions needed to build a brighter future.

Here’s the quote:

Commenting, Chief Secretary to the Treasury, Laura Trott MP said: 

“Labour’s sums just don’t add up, torpedoing their fiscal rules. Sir Keir Starmer and Rachel Reeves are now calling for the Government to borrow an extra £47 billion a year, which based on the OBR’s most recent forecast would break their fiscal rules. How are they proposing to pay for this? What taxes would they raise or spending would they cut?

“Labour will always take the easy way out not the difficult long-term decisions, leaving you and your family to pay for it.

“Only Rishi Sunak will halve inflation, grow the economy and reduce debt, taking the long-term economic decisions needed to build a brighter future.”

Here’s the footnote:

Rachel Reeves said Labour would extend full expensing at a cost of £10.7 billion in 2024-25 .'She would also make full-expensing, a 100 per cent tax relief on capital investment, permanent'.  ' The temporary measure that has been announced costs £8.0 billion in 2023-24, £10.7 billion in 2024-25 and £8.7 billion in 2025-26.' (Bloomberg, 13 November 2023; OBR, Economic and Fiscal Outlook, March 2023, link) 

To repeat: this is a Treasury minister attacking Labour for irresponsible spending which turns out to include some of the same spending the Treasury is about to announce. Sense-checking a press release turns out to be a long-term decision that’s just too difficult.

Laura Trott allowed this to go out in her name on the day she was given the job of Chief Secretary to the Treasury. Maybe she didn’t look at it. Maybe she didn’t know Jeremy Hunt was considering the full expensing move yet. Maybe she did know and didn’t care. But she should be raging that some combination of CCHQ and the Treasury spads allowed her to put herself in a situation where she looks like a muppet.

What’s worse is: this has happened before.¹ At the start of the year, in the full knowledge that the Conservatives were highly likely to retain the fuel duty freeze they have retained every year for over a decade, Rachel Reeves called on Jeremy Hunt to retain the fuel duty freeze. It was a smart little play: she got a decent write-up in The Sun for it and when the announcement eventually came it made it look (only a bit, admittedly, because they would definitely have done it anyway) as if the Tories were following her lead.

And what did the Tories do? At the very same time that they were briefing that they, too, were minded to retain the fuel duty freeze, they used Reeves’ call on them to do this as evidence of Labour’s fiscal irresponsibility. They costed it at £5.7bn, part of what they claimed was an overall Labour borrowing black hole of £45bn.² And then… they put it in the Budget.

Why did Reeves call for a fuel duty freeze? Partly, I’m sure, because she agreed with it, but partly because she was pretty sure that the Government would do it too - it looked like a spending commitment, but it was a free hit (they did do it in the Budget, as expected, for the 13th year in a row). Why did she call for full expensing to be made permanent? Partly because she agreed with it, but partly because she expected it to happen - another free hit.

Almost nobody knew for sure that the Government was going to do these things, even if they could make informed predictions. But some people knew. And those people are - or ought to have been - the same people who signed off on the attack on Reeves for saying her calls were irresponsible.

Falling for this once is bad enough. Falling for the same trick - watching your opponent call for something she thinks you’re about to do, attacking her for calling for it, and then doing it yourself anyway - twice in two fiscal events is something a serious political operation does not allow to happen. But here we are.

1. I wrote about this before, here. I didn’t expect them to do the exact same thing again.

2. The funniest bit of that list was where they costed a suggestion in January by Shadow Health Secretary Wes Streeting that Labour would consider the New Zealand policy of phasing out cigarette sales to teenagers as “Ban smoking, resulting in a loss of tax income – £7.6 billion”. That’s funny not just because describing the policy as “Ban smoking” is funny, and not just because costing this purely in tax loss terms is funny, but because Rishi Sunak then went on to announce the exact same policy at his party conference in September.