JEREMY HUNT: After her spending U-turns, let us hope Chancellor Reeves has learnt from her mistakes

By JEREMY HUNT, FORMER CHANCELLOR OF THE EXCHEQUER

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Do I feel sorry for Rachel Reeves? That was one of the more unexpected questions I have been asked this week in my interviews to mark the launch of my new book Can We Be Great Again? which was serialised in the Mail.

So let me say up front that, on a personal level, yes, I do recognise Rachel has some unenviable choices. Many of those, however, are because of decisions she herself has made.

In next week’s spending review she has a chance to put them right. Here are three things I will be looking out for that will tell us if she has.

Firstly, Labour promised to end austerity – normally defined as cuts to unprotected departments. They opposed every single difficult spending decision we took to get our national finances under control. Remember how George Osborne inherited a deficit of 10 per cent of GDP from the previous Labour government? We more than halved that. But now they are in government, they are doing exactly the same cuts themselves!

I do recognise Rachel [Reeves] has some unenviable choices. Many of those, however, are because of decisions she herself has made, writes Jeremy Hunt

I do recognise Rachel [Reeves] has some unenviable choices. Many of those, however, are because of decisions she herself has made, writes Jeremy Hunt

But the real question is not a fake debate about the definition of ‘austerity’ but whether you can avoid the impact on the vital public services people depend on. That can only be done by making public services more efficient.

We know there will be cuts for the Home Office, the Ministry of Justice and the Department for Communities. But will we see funding to make them more efficient? Will we get a new national computer system for the police? Digitisation of the courts? Measures to drag the planning system into the online age?

Secondly, having told us she was against ‘black holes’, the Chancellor has now created her own one: a Strategic Defence Review that needs 3 per cent of GDP on defence when she has only put 2.5 per cent on the table. Raising defence spending to 3 per cent-plus is necessary to stop war – there is no other way to say it. There will be no hiding place for the Government if the Chancellor ducks this.

Finally, assuming she sticks to her spending envelope, the elephant in the room is whether her fiscal rules will mean more growth-destroying tax rises in the autumn Budget. These can only be avoided by welfare reform.

Getting working age claims back to 2019 levels saves £49 billion – more than enough to avoid tax rises and fund an increase in defence spending. Biting the bullet on our mushrooming welfare state is good fiscally, good economically and, most of all, good for the individuals involved. That’s because work is by far the best poverty-killer. Absolute poverty went down more than a million under the Conservatives – because we created four million more jobs.

So if we hear nothing on Wednesday about welfare reform we should fear the worst in the autumn Budget. ‘Labour isn’t working’ was the devastating slogan that got Margaret Thatcher elected. Let’s hope Rachel Reeves has learned the lessons of history.

LabourRachel ReevesJeremy Hunt