Rachel Reeves goes back to the future with her public finances statement

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For George Osborne read Rachel Reeves. For 2010 read 2024. The party affiliation might be different but the message from the two chancellors shortly after arriving at the Treasury was the same. In both cases it amounted to two basic propositions: this is going to hurt, and the other lot are to blame. Like Osborne, Reeves said she would not duck tough decisions, and she was as good as her word. Labour’s first chancellor in 14 years announced £5.5bn of spending cuts and made no secret of the fact there would be more pain to come in the budget on 30 October. Even after the decisions to scrap infrastructure projects, can the Rwanda asylum seeker scheme, means-test the winter fuel payment for pensioners and abandon plans to make social care more generous, Reeves said she would still have a £16.4bn hole to fill. The implications of that are clear. There are tax rises to come in the budget and tight settlements for Whitehall departments in a one-year spending settlement. Ruth Gregory of Capital Economics said she expected tax rises of £10bn, with the rest of the shortfall covered by £7bn of additional borrowing. All of which is par for the course for an incoming chancellor. A well-established rule of politics is to get bad news out of the way early and craft a narrative that the measures are unavoidable due to the incompetence of the previous lot. Osborne proved a master of that in 2010 with his repeated refrain that Gordon Brown’s Labour government had failed to mend the roof while the sun was shining. Labour has learned from the experience. In truth, some of the “hole” in the public finances was due to Reeves’s decision to accept the recommendations of pay review bodies for public sector workers. That will cost £9.4bn and as Paul Johnson, the director of the Institute for Fiscal Studies noted, was not quite the bombshell the chancellor professed it to be. Johnson did, however, provide some useful political cover for the chancellor. She was within her rights to feel aggrieved at some of the upward pressures on spending that she had only found out about since arriving at the Treasury. “Some of the specifics are indeed shocking, and raise some difficult questions for the last government,” Johnson said. “If the scale of these overspends and spending pressures was apparent in the spring – and in lots of cases, there’s no reason to suppose otherwise – then it is hard to understand why they weren’t made clear or dealt with in the spring budget. Jeremy Hunt’s £10bn cut to national insurance looks ever less defensible.” skip past newsletter promotion Sign up to Business Today Free daily newsletter Get set for the working day – we'll point you to all the business news and analysis you need every morning Enter your email address Sign up Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Newsletters may contain info about charities, online ads, and content funded by outside parties. For more information see our Privacy Policy . We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. after newsletter promotion Sooner or latter, no matter how successful Reeves is at playing the blame game, governments are judged by their own choices. Her decision to cut infrastructure spending sits oddly with Labour’s “growth mission”, while the decision to limit winter fuel payments to households receiving pensioner credit will not be universally popular in Labour circles either. Honeymoons don’t last for ever.