London Playbook PM: Rachel Reeves ain’t sorry — but vows never again

 

London Playbook PM: Rachel Reeves ain’t sorry — but vows never again

By Emilio Casalicchio

16 mins read

November 25, 2024 6:27 pm CET

https://www.politico.eu/newsletter/london-playbook/london-playbook-pm-rachel-reeves-aint-sorry-but-vows-never-again/

 

London Playbook

By EMILIO CASALICCHIO

 

Good afternoon. This is Emilio Casalicchio at the CBI conference at the QEII center in Westminster.

 

MONDAY CHEAT SHEET

—Chancellor Rachel Reeves defended her tax rises but made clear to businesses she won’t be back for more.

 

— Kemi Badenoch chatted principles and “dirty words” with U.K. PLC.

 

— The latest assisted dying row is about progress vs. stagnation due to fear of new costs.

 

— Downing Street shut down a report that British and French troops could be sent to Ukraine.

 

— But No. 10 didn’t want to take the Elon Musk bait.

 

TOP OF THE NEWSLIST

NOT SORRY SORRY: Chancellor Rachel Reeves didn’t apologize to business bosses for slapping them with new taxes … but did promise never to do it again.

 

What was I supposed to do? Following squeals of anguish from the Confederation of British Industry this morning about the £25 billion increase to employer national insurance contributions announced last month, Reeves said she had little choice and had heard no credible alternatives to plugging fiscal black holes.

 

On the one hand … on the other hand: Speaking in the past hour at the CBI conference in Westminster, Reeves said: “I’ve heard a lot of feedback. What I haven’t heard are many alternatives.” But she added: “You can be confident we’re not going to have to come back again and do another budget like this.”

 

Doubling the hell down: “I faced a problem and I faced into it,” Reeves told a Q&A on stage. “And we’ve now drawn a line under the fiction peddled by the last government.” She said departmental spending had now been set and ministers would now need to live within their means without extra borrowing or taxes. “We won’t have to do a budget like this ever again,” she insisted.

 

The listening chancellor: Reeves was giving a direct response to the telling off she got from CBI boss Rain Newton-Smith, who took to the stage this morning and blasted the new Labour government for springing tax rises on the business world. “From now on, we need to shift from consultation to co-design,” Newton-Smith said. “Tax rises like this must never again be simply done to business. That’s the road to unintended consequences.”

 

While we’re at it: There’s no doubt other sectors wouldn’t mind being in the room to help write the budget either. Hell, even Playbook PM quite fancies getting to hold the pen a little.

 

Nevertheless: Newton-Smith still seemed glad the Tories had been booted out, giving Labour credit for “drawing the curtain on a near decade of instability at home.”

 

Not awks at all: A few hours later, it was new Conservative Leader Kemi Badenoch(who served in a couple of frontbench roles towards the end of that rollercoaster decade) striding on stage to sell her wares.

 

Except … she still doesn’t have wares — just “first principles” she reckons need to be established before she can develop policies. As such she refused to set out whether she would reverse Labour hikes in employer national insurance, or take action in a bunch of other areas.

 

Indeed: Badenoch dodged a question from Playbook PM about the dire leasehold regime and whether she thinks the Tories chickened out of proper reform. She had just two pre-selected hacks to take questions from, so Playbook PM hijacked the audience questions with a hand up. Clip here.

 

Instead: Badenoch waxed on about how the government should promote free and fair competition (business heads in the crowd loved that) … how growth should be visible to the public and not about GDP numbers alone … and how profit and wealth aren’t “dirty words.” She also had a pop at the football regulator, and at how government has become a block on stuff being built. “I’m not telling you I have all the answers,” she insisted. “I’m telling you I’ve seen the system from the inside and it’s broken.”

 

I’m nice, honest: Badenoch also blamed her reputation for being a spike-meister on people not liking to hear her argue government should do less not more. “People want the government to fix everything,” she said. “They want the government to solve everything, and if you ever sound hesitant, then they will make you out to be a cruel, unfeeling person, as I have discovered, to my own personal cost.” Yep … all the people on the Badenoch beef list just couldn’t handle being told government can’t do it all … right?

 

One more thing … Reeves is still insisting she won’t be rolling back on her tax changes, as the independent Institute for Fiscal Studies became the latest to suggest tweaks that could better target her inheritance tax clobber on farmers.

 

The thing about all this chat is … Donald Trump could take office in the U.S. at the start of 2025 and blow our economics out the water with tariffs or whatever. Deputy Chief of Mission at the U.S. embassy Matthew Palmer told the CBI the feared MAGA tariffs would “vary from industry to industry, product to product, country to country, and that will shape what the laying of the land looks like.” There’s nothing businesses love more than an unpredictable costs rollercoaster.