By Jeremy Hutton, Policy Analyst
Since 2015, the Conservative Party have not had to worry much about Her Majesty’s Most Loyal Opposition outside of general election campaigns. Indeed, the principal opposition has often come from the Tories’ own benches. Delivering the annual Mais lecture earlier this month - the City of London’s foremost event on banking and finance - the shadow chancellor Anneliese Dodds, however, signalled that the winds of opposition are blowing again.
Long gone were the rants about austerity. Far from repeating tired old tropes, this was a speech that dealt with reality. Instead of inciting interest by proposing outlandish policies, it aroused interest precisely because it was so responsibly dull. So responsible in fact, the word was mentioned no less than twenty-one times.
Dodds firmly planted the Labour flag next to the respected Institute for Fiscal Studies and referred to the organisation several times, endorsing many of their suggestions to create a more resilient economy. Notably, Dodds adopted the IFS’s suggestion that the UK should consider its public debt over a much longer period and attempt to learn from the Second World War, which Britain financed through long-term gilts. The last of the war debt was actually only paid off in 2006. This approach would not be out of step with how Britain has historically treated the debt accrued in crises. Critically, that means tax rises are not needed right now. Even we at the TaxPayers’ Alliance have urged the government to put economic growth before immediately trying to pay off the debt.
But this is not to say anyone, including Dodds, can be blasé about Britain’s rising public debt. Rather, she remarked that “it would be an irresponsible policymaker who planned on the assumption that low interest rates will continue indefinitely.” By her own admission, the shadow chancellor has little faith in Rishi Sunak’s assertion that Britons will loosen their purse-strings at the same pace as the government may loosen restrictions.
It is this recurring cavalier optimism which the government has clung to over the last year that, by Dodd’s analysis, has meant Britain’s economic hit has been harsher than our fellow developed economies. According to Dodds, it is the chopping and changing of plans, the arbitrary goalposts, and the failingly rigid schemes, that have been so harmful to businesses, instead of establishing a clear strategy from the outset.
A typical and easy charge to make for an opposition politician, of course. But before we’d even heard of coronavirus, it was visible in the proliferation of rudderless spending schemes like the new Towns Fund and failing major public projects. Over the past 12 months, the government’s capacity for waste has been exposed time and time again - repeated headlines of a million here, a billion there, down the drain. Labour are late to the party on calling out this waste, but taxpayers will be relieved that at least they’ve finally turned up.
The shadow chancellor’s solution? To assess the quality of public spending annually by both the national audit office and the government itself. Every year bad practice would be exposed, scrutinised and constructively criticised. However, it would still risk letting bad projects slip through the net and reinforce current mechanisms which have failed to prevent repeat instances of poor spending in the past. Single reports are also easy for wily politicians to ignore. It’s a disappointingly toothless solution.
Far better would be for the shadow chancellor to back calls for a budget committee. Focused on preventing poor spending in the first place, such a committee would take the lead in enhancing the government’s efficiency, linking improvements to budgetary approval. It would give Parliament a role in scrutinising existing spending - rather than always calling for more, more, more - and allow politicians to show their fiscal mettle in calling out waste, in the same way that the excellent Dame Margaret Hodge did with the Public Accounts Committee between 2010 and 2015.
The shadow chancellor’s speech tried to place a significant distance between itself and Jeremy Corbyn’s Labour. Questions remain of course, particularly around what levels of tax and spending Dodds would like to see. Her emphasis on value for money is encouraging at the very least. Taxpayers will be watching, waiting and wanting to hear more.