Rachel Reeves has a problem with saying ‘sorry’.
It doesn’t seem to matter what the controversy is, whether it’s being disingenuous about ‘black holes’, finessing her CV or forgetting to pay for a ‘selective’ licence for renting her London home, the Chancellor is incapable of even the tiniest hint of mea culpa or remorse.
And so it was again yesterday when Reeves appeared before the Treasury Select Committee to discuss the extraordinary leaks in the months leading up to her Budget, and now the subject of an internal Treasury inquiry.
Presenting that strangely blank poker face she does when under fire, all she managed to admit to was that there were too many leaks and speculation, that these were ‘very damaging… unacceptable’ and that she was deeply frustrated by it all.
What’s more, she said, many of them, such as the supposedly well-sourced kite flown about raising income tax, were inaccurate and that she ‘categorically’ didn’t sign off on them.
Which is why she herself has ordered an internal inquiry that will interview everyone involved, from ministers to officials, and include the leak of the Office for Budget Responsibility’s appraisal which went online an hour before the Budget.
Defiant: Chancellor Rachel Reeves appears before the Treasury Select Committee to discuss the leaks in the months leading up to her Budget
What Reeves did not say, however, was that she apologised for the very damaging and unacceptable leaks which triggered panic among investors and set bond yields rising again.
As we now know, these leaks had a real-life impact on the behaviour of thousands of investors and pensioners who withdrew billions of pounds from their funds or sold out of their Isas because of fears prompted by the speculation.
These leaks were not simply the normal ‘political discourse’ which surrounds Budgets.
It’s quite usual for department ministers to fly kites to help them in their bids for more money or for Treasury officials to float policy ideas to see how well they go down with voters.
These leaks were off-the-scale in their mischief-making, you might suggest – both deliberate and destructive.
As business leaders warned from the shop floor, the endless speculation ensured consumers kept their wallets closed, waiting until Budget day to see how bad the tax rises would be.
What Reeves also did not say – and was surprisingly not asked by committee members – was why she did not knock down much of the speculation.
Looking back, the purpose of her hastily arranged breakfast press conference warning of big tax rises to come (when she knew tax receipts were better than expected) now appears even more misleading and bizarre than it did then.
And, if the Chancellor really was so frustrated by the leaks, why didn’t she call together her No 11 team, at any time from August onward, to read the Riot Act?
Why didn’t she order them to stop leaking about potential tax rises because they were so damaging to confidence? Maybe she did, and they ignored her. If so, that’s even more damning of her authority.
Reeves has made much of being the first woman to hold the job of Chancellor and Second Lord of the Treasury, yet has also moaned pathetically about being criticised more because she is female.
You can’t have it both ways: with the honour comes accountability and responsibility – characteristics which she sorely lacks.
The buck stops with her. You might even say that if the Chancellor were a man, he would have resigned by now.
Bottom gear
Yet more evidence that the impact of the Chancellor’s two Budgets are holding back animal spirits rather than driving growth comes from the latest British Chambers of Commerce (BCC) survey.
It forecasts growth will drop to 1.2 per cent next year because of tax rises and slower productivity. Even more shocking is that investment, the litmus test for confidence, is expected to grow just 0.9 per cent.
That’s because companies are having to absorb higher business rates, higher National Insurance and rises in the minimum wage.
What a surprise! If you bash business with higher taxes and costs, you are going to get stasis.
As the BCC brutally points out, there are no ‘direct’ growth measures. Exports will also be down, imports will be down, inflation will cool, wage costs will come down too as will interest rates by a smidgen.
Sadly, unemployment will rise. In other words, the country is stuck in bottom gear without a qualified driver to take us into the fast lane.
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