Demob-happy IFS director tears into Rachel Reeves's spending review
You can only conclude that Paul Johnson is demob-happy. The director of the Institute for Fiscal Studies is off to run an Oxford college in a couple of weeks and seems determined to go out with a bang. Normally, the scourge of chancellors and all things Treasury is quite measured in what he says. Borderline wonkish in his forensic analysis of financial statements. Choosing his words carefully as he peels back the political spin to deliver his verdict on the true state of the public finances. But for his last outing we got to see the real Paul. Paul Unplugged.
The IFS press conference has become something of a tradition. The place where budgets and spending reviews come to die the day after they were delivered. Where the numbers aren't given a chance to lie. Johnson is nothing if not equal opportunities. No chancellor of either party is given a free pass. If there are discrepancies to be found, the IFS can be sure to find them. To get given a mark of B– from Paul is the sort of result a chancellor can only dream about.
This wasn't to be Rachel Reeves's lucky day. Johnson had been up through the night crunching the numbers of Wednesday's spending review and they didn't look good. Maybe he had just had a bad morning, but for once his language wasn't couched in any niceties. The chancellor's spending plans might just about stack up according to her own fiscal rules, but if – as was probable – the Office for Budget Responsibility was to downgrade its forecasts, then Reeves was a 'gnat's whisker' away from tax rises in her autumn budget.
It got worse. The £14bn of efficiency savings were just not credible. Rather than going through a line-by-line approach of every departmental budget, the Treasury seemed to have made a blanket 10% cut across the board. 'That is not the result of serious analysis,' he said. 'I hesitate to accuse the Treasury of making up numbers, but …' But the government had been making up numbers. We were in the realm of fantasy economics.
On we went. Contrary to what Reeves had said, it was his view that the economic forecasts and the public finances had not improved over the last year. He waited to be convinced otherwise. Anyone any ideas? No. Case closed. He ended by saying that all spending reviews are largely a work of fiction. A triumph of hope over experience. Governments always end up having to revise their forecasts upwards and that health and defence were bound to need more cash in three years' time. With that, he put his copy of the chancellor's statement into the shredder.
Even so, Reeves wasn't about to give up on her spending review just yet. It was still the only game in town. The Tories had nothing to offer anyone and Reform's plans extended to bankrupting the entire country within six months. Like it or not, Rachel is the only credible witness in parliament. The only politician with a credible economic plan. She had a programme of renewal where others only had fantasies. There was just the small matter of convincing people she could pay for it all.
Over on the BBC's Today programme, presenter Nick Robinson had also insisted that tax rises were an inevitability. Reeves prevaricated. That wasn't in the plan but she wasn't going to make plans for what would be in the budget now. The downturn in the April Office for National Statistics growth figures was because of global events: when the quarterly growth figures had gone up, it was entirely down to measures she had taken to stabilise the economy. Everyone would be getting more money and feeling better off apart from the people who wouldn't. Labour wasn't about to change its mind about disability payments though it might change its mind about disability payments.
This was a masterclass in misdirection from Rachel. A lesson for any politician in handling a media interview. Say one things and then immediately contradict yourself. Insist that two opposites can both be true. You had to feel for Robinson. He just couldn't keep up with Reeves. Couldn't lay a glove on her. And no one was any the wiser about the spending review.
Earlier on the same programme, Kemi Badenoch had been given her chance to make the case for what the Tories might have done differently. Instead, she chose to pick a fight with presenter Emma Barnett. Mornings aren't Kemi's best time of day. Then neither is the afternoon or the evening.
What bit of the spending review would you drop, Emma asked. That's the wrong question, Kemi snapped. After that, it was almost impossible to understand a word as they both talked over one another for the best part of eight minutes. But the rough gist, as far as I could tell, was that Kemi thought that everyone but Kemi was a complete halfwit and that her policies were far better than everyone else's because her policies were to have no policies.
Over in the Commons there were near unanimous congratulations for David Lammy in securing a deal with the EU over Gibraltar. All centring on allowing British and Spanish border guards to be in place at the airport. Much as has happened on the Eurostar services at St Pancras for years. You rather wondered why it had taken so long to think of doing the same on Gib, but Lammy was insistent that this was the apogee of diplomatic relations and was effusive in his thanks to former Tory foreign secretaries for paving the way. Even Priti Patel seemed almost happy.
There were just a couple of dissenters. Step forward former foreign secretary James Cleverly. He seemed mostly put out that it hadn't been him who had secured the deal. He couldn't help thinking Lammy must have given away far too much to the untrustworthy Spanish. Dave had to explain that the Gibraltar government were totally happy with the deal. No sovereignty was conceded. Jimmy Dimly wasn't convinced.
The previous evening, Nigel Farage had said that Gibraltar now felt a little less British. What a sad little world he lives in. Dicky Tice took up the mantle. Could a Spanish border guard turf out a Brit? Lammy smiled. If Dicky was stopped, he would be handed back to the Brits and flown home. After that, the Spanish could ask to have him extradited to Madrid. We can but hope.
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