Rachel Reeves has printed her pre-budget pitch in The Guardian this morning.

In it, she claims that the financial system has “sturdy foundations”, that rate of interest cuts, commerce offers and inward funding present Britain is “a beacon of stability”, and that Labour has already begun to show issues round. That, nevertheless, is only a polotical smokescreen for the precise messages in what she has to say.

First, she admits that UK productiveness is weak and has been because the monetary disaster. She blames austerity, Brexit and Covid, however insists we should not revisit the difficulty of EU membership. In different phrases, she recognises a major explanation for our issues after which refuses to do something of a lot substance about it.

Second, she guarantees funding in hospitals, infrastructure, power, defence and jobs and frames this because the path to progress, rejecting a return to austerity. That sounds optimistic, however there’s a catch as a result of, third, she insists this funding can and should happen inside her fiscal guidelines. She needs to repay the nation’s debt, preserve a grip on the general public funds, while stopping what she calls a Truss-style loss of market confidence. She says a progressive authorities can not justify the present ranges of debt curiosity, however totally ignores the truth that motion on this concern could be very a lot below her management if solely she had the braveness to take motion, which she has not.

Fourth, she sees nearer (unspecified and to date unnegotiated) ties with the EU, planning reform, and new commerce offers because the long-term selections wanted for restoration.  I don’t.

Studying this makes clear that, so far as Reeves is worried:

• Personal markets stay the decide of her coverage. Nobody else issues.

• Debt stays a constraint, imposing limits on what Labour can do, when that isn’t true.

• Development stays the measure of financial success, though, as I’ve argued elsewhere this morning, that is a metric effectively past its use-by date.

• Authorities funding should justify itself to monetary markets, to not the general public curiosity.

While Reeves’ rhetoric rejects Conservative austerity, the truth is that her logic stays totally acquainted, and in keeping with that strategy: she insists that the state should earn permission to behave by proving itself accountable to bondholders, which is exactly the logic that has at all times promoted austerity.

The actual questions that want answering are very totally different from people who Reeves is asking herself.  Most particularly, what she has to reply is how, if funding is important, however the authorities nonetheless thinks it should first repay debt earlier than it might make investments, can the UK financial system ever break away from decline? That unresolved contradiction is correct on the coronary heart of what Reeves is proposing. I’ll reply it in a sequence of posts I’m now planning on the Finances I might be delivering this autumn. They are going to begin quickly.