The Treasury mind. From Philip Snowden in 1924 to Rachel Reeves in 2024
Aditya Chakrabortty has rightly criticised Rachel Reeves first statement as Chancellor as sticking very much to the austerity strategies and language of George Osborne.
The cynical spectre of Osbornomics is haunting the Labour party | Aditya Chakrabortty | The Guardian
He is right but the pedigree of Reeves’ statement reaches much further back in Parliamentary history to Labour’s first Chancellor Philip Snowden. He introduced his first and only Budget in May 1924 and later issued it as a pamphlet, the Housewives Budget.
Snowden was an ILPer but with a distinctly Gladstonian Liberal frame of mind when it came to economics. As Churchill noted Snowden shared the Treasury Mind with the Governor of the Bank of England. Rachel Reeves of course is a former Bank economist.
Snowden saw the Chancellor’s job as managing the economy in a prudent way and certainly not increasing public expenditure.
Even so on a class basis his Budget was well crafted in that sense that it made some minor concessions to the have nots, primarily around what is known as the ‘free breakfast table’ while doing nothing to increase taxes for the rich.
Snowden halved sugar duty and tea duty at a total cost of £23m and reduced tax on cocoa, coffee, chicory and prunes. He cut entertainment duty meaning cheaper seats in cinemas and theatres and abolished tax on sweetened table waters altogether. Tax on the middle class drink of soda water remained.
Reeves agreed a range of public sector pay increases sat on by the Tories, and ended discrimination against young people on the minimum wage. She also of course ended the winter fuel payment for some numbers. VAT on private school fees will be payable from 5th August and the Budget itself in October may address some wider issues of wealth and tax.
As with Snowden the issue of class is addressed, this is not what the Tories would have done, while leaving the basic financial structure very much as it was.
Hence while Reeves talked about economic growth she cancelled spending on new hospitals and rail projects. In 1924 a Liberal MP John Maynard Keynes asked Snowden why he had not committed £100m to construction engineering.
As Chakrabortty notes in her economic statement Reeves was clearly aware of Keynesian economics but like Snowden a century before she rejected them in favour of the Treasury mind.
Whilst there have been comments that “rail” and “hospital” projects have been cancelled I believe that all remain under review with the only announced cancellations being the A303 Tunnel and the A27 – but if you can clarify the other cancellations I would welcome it. Thankn you.