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Labour doubles down on ‘unfairness’ as Reeves draws dividing lines

By Greg Rosen
27 October 2021

By Greg Rosen

This far from an election, there is little merit for Labour in offering a detailed ‘alternative Budget’. It would be counterproductive: voters probably wouldn’t even notice it, and once the research team at CCHQ had picked it apart, it would provide ammunition to attack Labour. Fairly or unfairly, Blair and Brown held John Smith’s detailed 1992 Shadow Budget partly responsible for Labour’s 1992 election defeat and Labour’s Budget response today shows that Team Starmer agrees.

On Budget Day, it is the Chancellor who dictates the themes. The best Labour can hope for is take the shine off Sunak’s enthusiastic post-Covid message in the public mind, to frame the government as holding back rather than assisting Britain’s economic future, sacrificing the interests of key target voters for the vested interests of the Conservative donors.

These lessons were embraced today by Shadow Chancellor Rachel Reeves, standing in for Covid-isolating Labour Leader Keir Starmer. Ahead of the Budget, Reeves contrasted Labour’s approach with the government, characterising the social care National Insurance hike as a “jobs tax”, and linking HGV shortages to price rises that will subsume any pay rises. Reeves sought above all to paint the government as increasing the cost of living for working people, and to position Labour as the party to “keep the wheels of our economy turning”. Her main signature policy was to advocate for the freezing of business rates using money from significantly expanding the digital sales tax.

Sunak sought to undermine Labour’s key message, announcing measures to reduce and revise business rates, to boost the minimum wage, and to soften the universal credit cuts. But he left his flank exposed with the relative scale of tax cuts to banks and global businesses.

Reeves’ objective has been to define what Gordon Brown’s team used to call a ‘dividing line’ with the Conservatives, framing the Conservatives as “balancing the budget on the back of working people”, in contrast to Labour shifting the burden of taxation onto private equity, global corporations and those whose income primarily derives from stocks, shares, dividends and buy-to-let properties.

Today she attempted to double down on that messaging.

While Sunak announced new investment and spending, Reeves characterised it as insufficient, due to “wasteful spending” and “unfair taxation”, rooted also in “anaemic growth” relative to the preceding New Labour decade. By implication, through securing higher growth Labour could spend more without taxing more.

For Labour, as with the PM, ‘building back greener’ provides an economic opportunity. The Treasury has been slow to align with that ambition and Reeves was able to critique the dissonance between the government’s Net Zero ambitions and Sunak’s announcement on reducing the tax burden on domestic flights, rather than greener domestic rail: "At least the bankers on short haul flights sipping champagne will be cheering this budget today". Will Reeves’ message resonate?  We will have to watch the polls to find out.