The Chancellor set about spending with rare enthusiasm as she pandered to her Labour MP audience. In a heavily party drenched presentation she played fairy godmother giving out public sector sweeties to as many named MP s, public sector trade unions and client groups as she could cram in . A bloated state was put on a fattening diet.
Every part of the public sector mentioned was praised for its employees and achievements. Every part had according to Reeves been starved of money by the previous governments which had put up public spending every year. Not once did she mention the productivity collapse, the staggering losses of the nationalised industries, the huge cost overruns of many public sector projects. This was fantasy economics.
We are asked to believe they will build nuclear power stations on time and to budget, yet we are not told what either the cost or the timetable will be. We are asked to believe the newly nationalised railway will run to time and not send supplementary bills. We are told British steel is saved without being told how we replace the blast furnaces, square the Chinese owners and avoid all the US tariffs. We are asked to believe that re announcing tram and rail projects long in the pipeline will revive city centres and solve problems of urban decline.
There was no mention that longer term interest rates are way above Truss levels, that markets think the government is borrowing too much, or that the small increases in spend for the last two years look implausible under a spendthrift government wanting to be re elected. This Chancellor invented a black hole then set about digging a much bigger one.
PS The document issued after the speech promises 5% savings from efficiency improvements based on a £3 bn Transformation Fund to spend more on computing. This does not even remove all the lost productivity since 2019. There are targets to reduce administrative costs without explaining how.