As was darkly foretold, Rachel Reeves has launched an avenger’s assault on her Conservative government predecessors for the public finance situation she has inherited, giving Jeremy Hunt such a bollocking in the House of Commons he must have wondered if the wedge of his personal fortune he poured into hanging on to his stockbroker belt seat had been wisely spent.
And wise spending – or, as Reeves sees it, the practically delinquent lack of it under the Tories – was, of course, the headline theme of the new Chancellor’s speech. However, her own definition of wisdom in these matters was only loosely outlined.
No surprise there and no great shame, either: Labour has been in charge for only three-and-a-half weeks. But every hint and signal about where public money might be directed in the coming years and how Reeves’s first budget, announced for 30 October along with a comprehensive spending review (CSR), might make decent-sized sums of it available will be of keen interest to City Hall, London’s boroughs and London’s businesses.
Back in April, chasing for his third term as Mayor, Sadiq Khan made the most of campaign visits by his party’s top brass, Keir Starmer and Reeves included. These fortified his message to London voters that to once again prefer him to a Conservative would very likely be followed by the election of a Labour national government, bringing to an end five years of Tory point-scoring and hostile interference from on high.
The arrival of that Labour government, perhaps a few months sooner than expected, has been hailed by Khan and ministers alike as the start of just such a collaborative relationship. The next one hundred days should give us a good idea about how fruitful for London that relationship is going to be.
Transport secretary Louise Haigh revealed on the occasion of her post-election bus ride with the Mayor that he had brought a “funding request” with him. Her department would be “working with him” ahead of the CSR, she said.
What on? Cabinet minister Pat McFadden, one of Starmer’s closest colleagues, emphasised to Times Radio prior to Reeves’s speech that the HS2 situation is “very difficult” and would be examined along with everything else. If that sounds ominous it’s hardly out of tune with everything else we’ve been hearing about the indefinitely stalled Old Oak to Euston portion of the line of late.
And McFadden went on to say, “we will prioritise things that will contribute to growth”. Khan got an optimistic line into the Evening Standard about the government understanding “the importance of London for growth” before Reeves rose to speak, and McFadden’s words were in line with her telling MPs the CSR will look most kindly on infrastructure projects “that will attract private investment”.
It’s hard to see, notwithstanding the financial mess it has become, how an HS2 terminal in central London, engine of the UK economy, fails to qualify.
False hope? Every other Mayor in England will be looking for their “fair share” of whatever Reeves decides she can shell out and the capital might not be a political priority. But, as the Mayor observed, it has to be a growth priority – that’s national as well as London growth. Reeves, who, to put it mildly, does not give the impression of being dim, will surely be aware that the Central Activities Zone alone produces an extraordinary 10 per cent of the UK’s economic output.
Here speech provided hard detail only about the bad things the Tories did and nastiest bad news about filling a £22 billion “black hole” on what was, after all, a convenient day for it. The axing of winter fuel payments for pensioners not in receipt of pension credit was the toughest. Boris Johnson’s already pretty bogus “new” hospitals programme has gone next to nowhere and the forthcoming review of it may sound ominous down Whipps Cross way and elsewhere, and displeasing in light of Labour’s previous commitments. There was no talk of housing, presumably in deference to Angela Rayner unveiling proposals for a revised National Planning Policy Framework tomorrow.
Islington leader Kaya Comer-Schwartz has greeted as “great news” Reeves confirming multi-year financial settlements for councils, though the size of those settlements remains to be seen. Lambeth leader Claire Holland, in her capacity as chair of London Councils, welcomed the change too, saying it will bring greater stability to Town Hall budgets and “strengthen our role as drivers of local growth”.
There’s a lot of lobbying and number crunching to come. City Hall’s workload includes putting meat on the bones of a London Growth Plan, touted by Khan alongside Reeves during the mayoral contest as the way to generate 150,000 high-quality new jobs. Reeves’s commitment to “supporting people into work” sound like an opportunity for the Mayor to press for a single budget for training and skills to be devolved to the capital, as recommended on this website by Tony Travers and Robert Gordon Clark.
The Chancellor has achieved her goals of placing the blame for the nation’s parlous public finances firmly at the Tories’ door and sending out her steely message that “if we cannot afford it, we cannot do it”. The absence of “levelling up” hot air was refreshing. But more cuts along with tax rises are to come. How London and Londoners fare come the end of October very much remains to be seen.
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