The prime minister is keen to change the conversation after the Tories called his chancellor’s ethics into question
The political fates of Keir Starmer and Rachel Reeves are intertwined. Allies say that if one goes, the other is likely to follow.
This is why, in the wake of the budget, the Conservatives have attempted to focus their response on the chancellor’s personal ethics, accusing Reeves of lying about the rationale behind her record-breaking tax rises.
And it is also why, in response, Starmer has chosen to fight back personally. In a speech on Monday, he will seek to draw a line under the row and refocus attention on the government’s wider economic plan.
Writing for the Guardian before that speech, the prime minister argues: “At the budget last week, we made the right choices for Britain, cutting the cost of energy with £150 off bills, protecting the NHS and tackling the scourge of child poverty by removing the two-child limit.”
Seeking to buy himself and his chancellor political breathing space, he will argue on Monday that his programme – which includes welfare reform and deregulation – is a “big, bold long-term plan” and not a “set of quick fixes”.
The prime minister has reason to shift the focus on to his long-term economic goals and away from the immediate aftermath of the budget, given the row that has engulfed the chancellor over whether she lied about why she was raising taxes.
The Conservatives have accused Reeves of using reduced productivity forecasts from the Office for Budget Responsibility (OBR) as a smokescreen for tax rises.
While the OBR did downgrade its productivity predictions, it also upgraded its forecasts for wages and tax receipts, which ended up leaving the chancellor with a surplus rather than a hole.
Kemi Badenoch, the Conservative leader, has also accused the chancellor’s allies of trying to manipulate financial markets by briefing on 14 November that Reeves had decided to drop a plan to increase income tax rates because of better-than-expected news from the OBR.
In fact, Reeves and her team had known for some time about the OBR’s more rosy outlook – even when she gave a rare pre-budget speech on 4 November warning that a lower productivity outlook would have consequences for wages and tax receipts.
That timeline was spelled out clearly last week in a letter from Richard Hughes, the head of the OBR, to the Treasury select committee.
The letter was meant as a corrective to the Treasury briefing on 14 November, when officials attempted to calm investors spooked by news overnight that the chancellor had ditched her plans to raise income tax rates.
Coming after weeks of stories about the OBR – including Reeves publicly questioning the timing of its productivity review and criticising it for not “scoring” pro-growth government policies – this flurry of briefings appears to have particularly irked the independent forecaster.
Reeves argued on Sunday that she needed to put up taxes to increase her buffer against unexpected costs to protect her fiscal rules and keep government borrowing costs down. Her allies point out that without the productivity downgradeshe would have been in a far more comfortable position.
But Reeves and Starmer know that the more challenging long-term problem is that the public appears to have made its mind up on how the government is managing the economy. Polling for More in Common after the budget shows just 16% of voters think the chancellor is doing a good job – almost exactly the same as thought so beforehand.
The prime minister hopes that voters will eventually feel the impact of higher public spending and business deregulation. On Monday, he will argue that his plan should only be judged at the end of the parliament.
But with voters restless for their daily lives to improve, he may find that time is a luxury he does not have.
