0:00
It's not just Angela Raina who finds
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herself on the defensive. Rachel Reeves
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has come out fighting, claiming many of
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her critics are talking rubbish. So, who
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could she be talking about? And does she
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have a point? Welcome to the Week in
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Business with me, Christian May.
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Imagine returning from your summer
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holiday to find that your boss has
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poached your deputy and hired a brace of
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advisers to advise him on your job.
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That's the situation Rachel Reeves found
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herself in. Though Downing Street
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insists that she and Kama agreed on the
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plan, the mini reshuffle of people and
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roles that most people have never heard
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of and will never think about was in
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fact pretty consequential. In appointing
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Darren Jones, until recently the
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chancellor's number two, to a powerful
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new position inside number 10, Starmmer
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is admitting that the machine has not
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been delivering. He needs Jones, we're
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told, to drive through his agenda across
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departments. Then in appointing his own
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personal chief economics adviser, he's
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admitting to a number of things. First,
1:00
that number 10 hasn't been across the
1:02
economic agenda politically and in terms
1:04
of policy choices. Secondly, he's saying
1:06
that the chancellor is not his chief
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economic adviser. And thirdly, his
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choice of guru is revealing. Minute
1:14
Shafi, Baroness Min Shafi, is no bland
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centrist. Fresh from an embarrassing
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stint running a US university about
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which the less said the better. She's
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now got the ear of the prime minister.
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Supporters say she brings clout and
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heft. But what will she do with it?
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She's on the record calling for people
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with comfortable pension pots to pay
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more towards the common good. And she
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worked handin glove with tax maniac
1:39
Torston Bell on a report that called for
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wealth taxes and higher inheritance tax.
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So she'll fit right in. Now, Rachel
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Reeves, having had her wings clipped in
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this way, has confirmed that her second
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budget will be on November the 26th.
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That's quite late, about as late as it
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can be. But, as Ian King quipped
1:55
yesterday, "Bad numbers take longer to
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add up than good ones." Reeves said the
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budget would be about reform and
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renewal, generating growth that people
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can feel. She also reiterated that her
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fiscal rules that day-to-day government
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costs will be paid for by tax income
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rather than borrowing and that she'll
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get debt falling as a share of national
2:15
income by the end of this parliament are
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non-negotiable. Well, that's good to
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hear and God knows the bond markets need
2:21
to hear it again and again. But it means
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that in the absence of stellar growth
2:25
forecasts, spending cuts or tax rises
2:28
are absolutely essential. You could
2:30
argue they're non-negotiable.
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We now know how hard this government
2:34
will find it to get spending cuts
2:36
through their MPs. They tried it once
2:38
and they were humiliated. So tax rises
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of course are coming. Expectations range
2:43
from around 12 billion to an eye
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watering 50 billion. Yesterday the
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chancellor specifically rejected that
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upper figure and she slapped the
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economics body responsible for coming up
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with it, the National Institute of
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Economic and Social Research. She said
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that this institute had got their
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numbers wrong more than once in recent
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years and she'd better hope that they've
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got them wrong now. She broadened her
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defense, saying that a lot of people
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trying to preempt her decisions are
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talking rubbish. Can't think who she's
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referring to. Could it be the British
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Chamber of Commerce who yesterday warned
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the economy is stuck in first gear as it
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downgraded its forecasts for growth next
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year? Or perhaps she meant us here at
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AAM. Or maybe she meant Deutsche Bank or
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the Institute of Directors or Capital
3:27
Economics or Goldman Sachs or ING or
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Bloomberg or Wthbones or Oxford
3:32
Economics or Andy Haldane or AJ Bell and
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IG or Quilter or Blick Rothenberg or the
3:38
Institute of Fiscal Studies. She went on
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to say that a lot of what her critics
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are saying is irresponsible, which is a
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bit rich coming from the chancellor that
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promised never to repeat a budget like
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last year's, but who now has to find
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twice the amount of money as she
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snatched from British businesses in
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higher tax this time last year. Reeves
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did at least concede yesterday that the
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economy is not working well enough for
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working people, but she said it isn't
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broken, just a little rickety perhaps.
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Can she fix it? Well, we hope so. But
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what's needed most of all is a reduction
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in spending to reassure investors and a
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reduction in the tax burden to stimulate
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real economic growth. I don't see how
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she could do either of these things even
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if she wanted to. But the clock is now
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counting down to the budget and at that
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point we'll see who's really been
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talking rubbish. And let me end by
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saying happy birthday to city am 20
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years old today. 20 years. A lot has
4:34
changed. This is my second stint as
4:37
editor. When I was first here, uh coming
4:39
in in 2015, uh I used to make the case
4:42
quite often for an app. I said, "We
4:43
should have an app." And higherups at
4:46
the time would say, "Why would we uh
4:48
discourage people from picking up the
4:49
newspaper? We don't want an app. We want
4:51
people to pick up the newspaper." Well,
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here we are some years down the line
4:54
from that, our 20th anniversary. We're
4:56
still in print and we have an app and a
4:58
quarter of a million people are now
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using it. Uh I think it's a really
5:02
exciting time for City AM. I'm really
5:04
excited to be back here. The team here
5:07
is as good as it's ever been in my
5:09
opinion and we have got some very big
5:10
plans. So 20 years old, here's to
5:13
another two decades. And that is it from
5:16
me this week. So stay up to date and in
5:18
the know with that city app and on
5:20
city.com and I'll see you next week.
