The spending review will reveal how far the government has been blown off course

Independent

2 days ago

According to what we read, the last holdout in the current set of negotiations with the Treasury about public spending plans is the home office, where the secretary of state, Yvette Cooper, hasn't yet agreed her plans for the next three years with the chancellor, Rachel Reeves.
Apparently, there's more cash for the police, although maybe not as much as they'd like (it never is, of course), but certainly not for much else. Given that Cooper is responsible for one of the most politically important jobs in government, getting migration down to levels acceptable to the right-wing media, she's right to be putting up a bit of a fight.
There can be no question of impropriety, but I wonder if, in all of this, I detect the guiding hand of someone else in the Cooper household?
Mr Yvette Cooper is better known as Ed Balls, he knows how the Treasury works – and he's been intimately involved in the spending review process from both sides. He was the closest of confidants to Gordon Brown when he was chancellor, then as a Treasury minister, education secretary and, for what it's worth, shadow chancellor and co-star of a podcast about politics with George Osborne.
Maybe, over the years – and without breaking protocol or the ministerial code, perish the thought – the Balls-Coopers have honed their considerable political skills mutually.
Indeed, Cooper herself served as a Treasury minister under Brown, and sat in his cabinet with her husband, when she was holding the purse strings at the Treasury, and he was pleading for more resources to give every child the best start in life. These days, he interviews her on ITV as if she were just another of Starmer's ministers he might be vaguely acquainted with. I wonder if they still go on date nights.
At any rate, Cooper plainly doesn't need that much advice, and she's worked out that her best tactic is to dig her heels in and take it to the brink. It's interesting to see these various big and middleweight beasts in the cabinet slog it out because it suggests that the Treasury under Reeves isn't as powerful as it once was, weakened by her own misjudgments of the past year.
Indeed, the institution is not as powerful as in the days when Brown and Balls were running it, in the High Noon of New Labour. In those days, the central command and control was pretty much complete, albeit there was more money about. At the time of the 1998 Comprehensive Spending Review (CSR), for example, one close observer at the time described the process thus: 'The CSR was a triumph for a strong prime minister and a strong chancellor, working together. Nothing illustrates this more clearly than the brutality of its execution. The two just called in ministers and told them how much they were getting. There was no appeal.'
How different to today!
Starmer, like Reeves, certainly started as a strong prime minister, but a combination of errors of judgment by him and by his chancellor have seen his personal ratings slump. He was actually never that highly rated as a leader, even when Labour was 20 points ahead in the polls. Now that he's hitting record lows and lags 10 points behind the ultimate catastrophe – Nigel Farage as prime minister of a Reform UK government – people are getting real, and getting nervous.
The Starmer-Reeves axis should be, and is, 'institutionally' strong in the British system; but the reality is they are both politically weak, both in it together and tied together by outrageous misfortune.
So they get pushed around far more than did Blair and Brown, for example. Not only has Cooper been able to drag out the process, but so has Angela Rayner, who, unlike Reeves (but like Brown), is actually the second most powerful figure in the party and the government.
Bridget Phillipson, the education secretary, seems to have been able to exert some leverage, although Reeves seems more sympathetic to the plight of our schools than much else. Liz Kendall, rather like Harriet Harman in the New Labour government, seems to operate social security policy as an arm of the Treasury anyway. Defence secretary John Healey and Wes Streeting at health and social care are in the blessed position of not having to beg too hard.
So what we see now is a dramatic, destabilising situation whereby a combination of an undeniably miserable economic position and relatively weak leadership is altering the centre of gravity within the governing party and, before our very eyes, changing its course.
For all the talk about tough choices and the squeals of anguish from their cabinet colleagues, Starmer and Reeves are gradually moving away from the kind of Cameron-Osborne 'fix the roof while the sun is shining' devotion to the public finances, and edging towards a more tax-and-spend welfare agenda where, almost out of nowhere, a newfound mission to eradicate child poverty has suddenly seized them. Now, they act left as well as talk left.
Well, you can exaggerate that, and the Tories no doubt will, because the real pain comes not from some sado-masochism in the Treasury but from Britain's dangerously dismal growth prospects. The pie isn't getting much bigger, but everyone wants and needs more, and so we end up, as a nation (and mixing the metaphor) fighting like rats in a sack. It's only a question of which rats are cunning enough to run away with a few extra crumbs, which is really what Cooper is trying to extract. Roll on Wednesday.