{"id":140572,"date":"2024-09-23T20:29:20","date_gmt":"2024-09-23T20:29:20","guid":{"rendered":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/09\/23\/could-higher-borrowing-give-rachel-reeves-her-optimistic-vision\/"},"modified":"2024-09-23T20:29:20","modified_gmt":"2024-09-23T20:29:20","slug":"could-higher-borrowing-give-rachel-reeves-her-optimistic-vision","status":"publish","type":"post","link":"https:\/\/news.talkwithrattan.com\/index.php\/2024\/09\/23\/could-higher-borrowing-give-rachel-reeves-her-optimistic-vision\/","title":{"rendered":"Could higher borrowing give Rachel Reeves her optimistic vision?"},"content":{"rendered":"
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Today saw a shift in rhetoric from Chancellor Rachel Reeves as she moved to promise the Labour conference a more optimistic vision for the country.\u00a0<\/p>\n

But quietly there also appears to have been a shift in approach, which could mean a markedly different landscape for public spending come the budget on 30 October, allowing far greater scope for Labour to borrow and spend.<\/p>\n

Politics live: ‘More optimistic’ Budget could be in store<\/a><\/strong><\/p>\n

The easiest way to see the change is to compare the chancellor’s actions before and after the summer.<\/p>\n

In July, when Ms Reeves created the \u00a322bn “black hole”<\/a><\/strong>, she gave us a taste of how she intended to fill it.<\/p>\n

Not only was there the means testing of the winter fuel allowance, but she did something the Treasury have been wanting for years – to cancel a whole load of investment projects, including road building with the A303 down to Cornwall, as well as delaying the hospital building programme.<\/p>\n

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This was as striking as it was confusing. Such projects would be the cornerstone of any government’s growth plan.<\/p>\n

Yet in the eternal tension in Labour between fiscal discipline and growth, the former had won out seemingly at the expense of the latter.<\/p>\n

And Treasury mandarins at the time were clear. The best way to fill an immediate \u00a322bn black hole would always be to delay or can these investments – or capital projects.<\/p>\n

Now fast forward to the Autumn<\/a><\/strong> and \u00a316bn of the black hole remains to be filled on 30 October.<\/p>\n

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There is no doubt that some tax rises, welfare cuts and spending curbs may be in the mix. But I am told that borrowing might also be used to plug this hole.<\/p>\n

This is by no means certain – the government’s first fiscal rule could yet prevent this from happening.<\/p>\n

But I am told they may reduce the amount of cuts or tax rises simply by putting it on the nation’s credit card once more.<\/p>\n

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This is just one of the ways that the government may allow itself to borrow more.<\/p>\n

There is the well-trailed discussion about redefining debt in the second fiscal rule – a technical change that could free up \u00a315bn or more.<\/p>\n

There’s discussion about how to treat other assets like GB Energy on the balance sheet, which again could allow the government to borrow more within its rules.<\/p>\n

The markets are unlikely to take fright. They have been convinced, it seems, by the vibe of Ms Reeves as an iron chancellor.<\/p>\n

However, there is now a chance the optimistic vision she outlined today could come sooner than we think – thanks to higher borrowing.<\/p>\n<\/p><\/div>\n


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Today saw a shift in rhetoric from Chancellor Rachel Reeves as she moved to promise the Labour conference a more optimistic vision for the country.\u00a0 But quietly there also appears to have been a shift in approach, which could mean a markedly different landscape for public spending come the budget on 30 October, allowing far […]<\/p>\n","protected":false},"author":2,"featured_media":140573,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","fifu_image_url":"https:\/\/e3.365dm.com\/24\/03\/512x512\/skynews-gfxwhatsapppromo-gfxwhatsapp_6490206.png","fifu_image_alt":"","footnotes":""},"categories":[603],"tags":[9274,2739,6572,40559,4947,4948,5172],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/140572"}],"collection":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/comments?post=140572"}],"version-history":[{"count":1,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/140572\/revisions"}],"predecessor-version":[{"id":140574,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/posts\/140572\/revisions\/140574"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media\/140573"}],"wp:attachment":[{"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/media?parent=140572"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/categories?post=140572"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.talkwithrattan.com\/index.php\/wp-json\/wp\/v2\/tags?post=140572"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}