In May 2001 the Conservative MP Oliver Letwin let slip, on a phone call to a journalist from the Financial Times, that his party had a long-term plan to cut public spending by £20bn a year. The idea – which his party furiously denied – was so controversial that Letwin was said to have gone into hiding. Labour produced a “wanted” poster for the missing MP. But in the following decade, as I write this week, George Osborne was able not only to impose bigger cuts but to sell them to the public as electoral promises. Letwin was busted for selling uncut Tory small-state ideology. The 2008 financial crisis gave Osborne a story to tell and a thesis to back it up. It was a flawed thesis which had terrible results, but it was coherent and he explained it brilliantly.
As new polling conducted by Ipsos exclusively for the New Statesman reveals today, if there is a story and a thesis behind Rachel Reeves’ fiscal policy, the public has no idea what it is. The country is being run according to fiscal rules that 96 per cent of people could not explain. Labour is asking the public to agree to cuts to benefits and unprotected spending for reasons that are mysterious to the average person, and are therefore not really reasons at all.
Here’s what the polling tells us: when a representative sample of voters was asked what the Chancellor’s fiscal rules actually are, the most popular response was: “Don’t know”. The second most popular response was “closing the £22bn black hole”, which is incorrect. Just four per cent of voters were confident that they had a strong understanding of Reeves’ fiscal rules; four times that number had “never heard of them”. Asked if previous chancellors followed their own fiscal rules, voters were again most likely to say they didn’t know.
Even politicians don’t necessarily understand their own government’s fiscal rules, as the former Conservative Treasury Secretary (and now shadow education secretary) Laura Trott demonstrated last year in an excruciating interview with Evan Davis, who had to explain to her that her own department’s debt rule didn’t actually mean debt would be lower at the end of the parliament.
If you don’t even know what a rule is, you’re probably going to be indifferent to its being followed. Only 18 per cent of voters in the poll said it would be a bad thing if Reeves broke her fiscal rules, “if it meant raising more money for public services”. (People were twice as likely to worry that it would be a bad thing if she broke the fiscal rules without such a justification.)
Of course, there is a group of people who both understand the fiscal rules and care about them – the market participants among whom the price of government borrowing is decided – and maintaining the price of government debt is important to managing the public finances.
What this polling confirms, however, is that voters will not accept an explanation of policy that is aimed at the market. Accordingly it finds that 46 per cent of voters think Reeves is doing “a bad job” as Chancellor. This is a worse negative rating than Jeremy Hunt received at any point during his time in the Treasury.
This is the risk of reading too much into the “Ming vase” strategy. During the election campaign, at the end of a long period of tumultuous Tory government, it was enough to just be anyone else. But government itself inevitably involves depriving other people of money. If you don’t make it clear that you do actually have economic principles, which follow on from real moral principles, you can’t really explain your actions to the public, which leaves them no room to forgive you.
This piece first appeared in the Morning Call newsletter; receive it every morning by subscribing on Substack here
[See also: Keir Starmer can rewrite the history of Brexit]
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