It’s not easy being a Hatter. After spending last season in the Premiership sun, Luton Town now sit 20th in the championship. We’ve just sacked our manager, erstwhile #sexyfootball icon Rob Edwards. And the recent return of prominent court-contempter Stephen Yaxley-Lennon to the headlines is an unwelcome reminder of my most infamous fellow fan.
But I’ve now had a quarter century of the perpetual turbulence of Kenilworth Road playing in the background. I’ve learnt, to misquote Richard Nixon, that only when you have know the deepest valley of losing 3-0 at home to Newport on a wet Tuesday in non-league can you truly ever know how magnificent it is to be promoted in front of 40,000-odd fans at Wembley.
It’s also, obviously, made me familiar with the works of a much nicer fan than Yaxley-Lennon: the late Eric Morecambe. It’s his wisdom that I aim to point in the direction of Rachel Reeves. With the news that the Chancellor is feeling depressed and hopeless, I’m sure she can do with a little positive thinking. Alas, that’s not what I will be offering her today.
Instead, I’m reminded of Morecambe’s immortal comment, directed at Andre Previn, about having all the right notes, but not necessarily in the right order. The Chancellor’s bruising brush with the bond markets is a subject in which us jobbing hacks can claim no expertise, as James Kirkup points out for The Spectator. If I was a finance wizz, I’d be in the City, not blogging.
But, as far as I can glean, the primary reason for borrowing costs rising to a 16-year high is that the markets are not convinced by Labour’s long-term growth strategy. They don’t believe her Budget of £40 billion tax rises, infrastructure boosts, and NHS bungs will boost our economy enough to avoid another round of hikes. Her already over-optimisitc projections lie in tatters.
If Britain continues to stagnate as our public services become ever more expensive, we will end up in the frightening fiscal future forecast by my friend Karl Williams. The sums will never add up; borrowing and taxes will be pushed relentleslly upwards. A doom loop of ever-higher borrowing costs for loans to cover ever-higher government debt repayment costs looms.
Hence why the Chancellor’s Spring Statement – supposedly nothing more than an update on the Treasury’s sums – will now be repurposed as another emergency Budget. And hence why Reeves is now so keen on her fellow ministers chucking any growth-orientated measure in her direction. She must convince the markets that our prospects aren’t as miserable as they think.
Having the Chancellor banging the drum for growth is a good thing. Putting rocket boosters under planning reform and stripping back the regulatory thicket are great ideas, if only they were credible. On AI, I tend to be a little more fearful, and hope not for Prime Ministerial speeches, but a Nuremburg approach for the madmen involved with developing it. But each to their own.
This is where Morecambe’s advice comes in. Surely Reeves should have been doing this in the weeks and months leading up to her Budget, to convince the moneymen that the tax hikes and borrowing would be justified, instead of as a panicked response to her fiscal headroom being wiped out? Rather than talking her inheritance down, she should have been talking her plans up.
Reeves was hampered in this endeavour by Labour’s greatest weakness: their assumption that the country’s prospects would improve simply because they were in power. Who needs a growth plan when you’re not the Tories? Feed a few CEOs some smoked salmon sandwiches, babble about a stability premium, and hey presto: growth will return, and sunlit uplands will unfurl.
The fundamental naivety of Labour’s approach has already been found out. Keir Starmer is no more of an expert on gilt yields than you or I. At least Liz Truss had views. If he sacked Reeves, he would not only look utterly rattled, but he would have no alternative diagnosis of what had gone wrong, nor would he have a successor to hand willing or able to pursue a different approach.
And thus, working in Reeves’s favour, is that any Chancellor would be facing this basic dilemma. Buffeted by international trends, as our Deputy Editor has highlighted, the future holds tax rises and borrowing increases until a scythe is taken to our welfare commitments or growth is permanently elevated. Or both. We need to channel the DOGE spirit, or we’re doomed.
If Keir Starmer gave Reeves the boot, her successor would confront the same challenge if they wished to remain within Labour’s fiscal rules. Legions of one-term MPs may wonder why they bothered to be elected if their only job is to vote through exactly the sort of ‘austerity’ policies they entered politics to oppose. But you can’t ignore the Gods of the Copybook Headings.
Another miserable day passes in the life of a pointless, discredited, and loathed government. A few scraps from Xi Jinping’s table won’t cover the costs of Donald Trump’s defence demands. More pledges will be scrapped, more departments squeezed, more backbenchers appalled. Everything will continue to get worse, whatever Labour tries, or whomever is Chancellor.
Traditionally, we should be feeling vexed, since we’d be in charge of this disastrous inheritance come 2029. But since we look set to have long since been written into the history books by Reform by then, I suppose we can sit back and relax. Worrying about Luton will be a far more worthwhile use of my time; their relegation prospects look positively rosy compared to ours.