Rachel Reeves’ alternative budget: taking the politics out of economics?

Rachel Reeves, former Shadow Work and Pensions Secretary, has published her own “alternative Budget”.  It sets out a set of six proposals which, she argues, George Osborne should follow later this month.

As proposals, they’re all excellent.  There’s nothing there one would seriously want to challenge.  Some are extremely important. But, equally, they don’t make a budget, which is all about taxation, and how much Governments will raise and borrow and spend.  It’s really more of a collection of fairly random economic objectives, without any guidance as to priority or delivery.

Moreover, and much more seriously, they’re not really an expression of a coherent political and economic programme.  It’s a list of policies that conspicuously avoids the big questions of income distribution, of the financialisation of the economy, of work and reward, and the fact that millions in full-time work are dependent on benefits for a basic sufficiency; in other words, it’s a technocratic, not a political statement.  The description of the UK economy’s failings is in most respects correct, but the proposals are given without context.  What is Reeves’ vision? Some of it is implicit, but much more context is needed.

And there’s nothing here to excite the voters on their sofas either.  The simple fact is that in 2015, despite having reams of good policy, Labour did not have a clear economic message – or for that matter, a clear vision – to put in front of the electorate.  At the heart of John McDonnell’s New Economics project is the search for just such a narrative; grounded, radical, intellectually serious, but above all simple and popular; something that is rooted in the recognition that austerity is a political, not an economic choice.

That’s not something that emerges from Reeves’ proposals.  We need to challenge the framing, but Reeves’ comments on social security in the last Parliament about being tougher on welfare than the Tories appeared to reinforce the austerity frame, not challenge it (even if the opposite was the aim).  The language Reeves uses is non-political; and yet every one of the problems she describes is profoundly political.  Taking the politics out economics is what allows austerity to pass without challenge.

Labour cannot afford the luxury of going into the next election without a clear economic narrative, or without a vision of what, economically, it wants to achieve.  It’s a pity that Reeves turned down the opportunity to become part of Labour’s team; her technocratic expertise would have been a huge asset in reframing economic policy. But essentially it’s about the “how” – important as that undoubtedly is if one is to be credible – rather than the “what”.  Labour needs an economic vision, one that will convince those despairing of the political process that things can be different.   But it’s difficult to read these proposals as anything other than an avoidance; a return to the comfort of the belief that Labour can win without challenging the economic consensus.  It’s the political framing that can really make the difference.