In a move that has sent tremors through the chattering classes and caused at least three think-tank economists to choke on their artisanal sourdough, Chancellor Rachel Reeves has issued a stark ultimatum to Andy Burnham: fall in line behind the government’s economic strategy or risk torching the last remaining shreds of Labour’s fiscal credibility. This, from a party that once upon a time believed you could solve unemployment by giving everyone a free donkey.
Speaking from a Treasury podium that looked suspiciously like it had been polished with the tears of disappointed Corbynites, Reeves deployed the kind of language usually reserved for telling your flatmate that their pet python has eaten the cat. “The British people,” she declared, her voice a perfect blend of steel and tepid Earl Grey, “did not elect us to repeat the mistakes of the past. They elected us to be responsible custodians of the economy, not the wingmen of every half-baked regional spending spree.”
Burnham, the Mayor of Greater Manchester and a man whose hair appears to have been styled by a benevolent deity of centre-left politics, has been agitating for more devolution and a relaxation of the government’s iron grip on public spending. He wants to build things, you see. Houses, railways, perhaps a statue of himself made from melted-down austerity-era primary school chairs. But Reeves, a woman who makes the word “prudence” sound like a threat, is having none of it.
The Chancellor’s message was clear: cling to the life raft of fiscal discipline, or drown in the choppy waters of bond market disapproval. She invoked the holy trinity of economic credibility: the IMF, the Office for Budget Responsibility, and that slightly sweaty-looking man from Goldman Sachs who always appears on Newsnight. “We cannot,” she intoned, “afford to be seen as a party of reckless spendthrifts. We have worked too hard, shed too many ideological skins, to throw it all away for a few extra cycle lanes in Salford.”
Burnham’s camp responded with the political equivalent of a wounded badger, insisting that their demands were modest, sensible, and backed by the kind of rigorous cost-benefit analysis that would make a McKinsey consultant weep with joy. But Reeves knows that the ghost of 1992 still haunts the Labour Party, the memory of a tax-hiking, credibility-losing shambles that kept them out of power for a generation. She is determined not to let history repeat itself, even if it means strangling the party’s more ambitious plans at birth.
The subtext, dear reader, is as thick as the gravy on a Wetherspoon’s banger and mash. Reeves is saying: I am the adult in the room. I am the one who understands that you cannot simply magic money out of thin air, no matter how many Times columnists tell you that Modern Monetary Theory is the future. Burnham, meanwhile, is the voice of the restless regions, demanding that the fruits of any future economic growth be distributed to those who have been left behind by decades of southern-centric policy.
But here’s the rub: both of them are right. The government does need to maintain credibility, especially with the markets currently twitching like a caffeinated squirrel every time someone mentions inflation. But it also needs to show that Labour can actually deliver something tangible, something that makes people’s lives better, rather than just promising not to be as catastrophically inept as the Tories.
So where does this leave us? With a Chancellor who would rather eat her own hat than be seen as fiscally irresponsible, and a Mayor who would rather be hit by a bus than abandon his northern powerbase. Somewhere in the middle, the Labour Party is trying to remember how to govern, while simultaneously keeping its warring factions from tearing each other apart. It’s like watching a nature documentary about a pride of lions that has forgotten how to hunt and is now considering a career in accountancy.
Will Reeves blink? Will Burnham be told to put his toys back in the pram and accept that austerity-lite is the best he’s going to get? Or will Labour’s coalition of reasonable centrists and semi-reasonable leftists shatter into a thousand pieces, leaving the country to be picked over by the vultures of populism? The answer, as ever, lies in the inscrutable mysteries of Westminster politics. But one thing is certain: the gin supply in this newsroom is running dangerously low, and I have a feeling I’ll need a very large one before this story is done.
