READERS of The National will not have been much moved by the criticism from the likes of the right-wing tabloids the Daily Mail or Daily Express of Rachel Reeves’s first Budget.

The day after the Budget, their front-page headlines were of a Halloween horror. But National readers may have taken a bit more notice of the international money markets being a bit spooked, leading to the value of the pound to fall significantly against the euro and the US dollar as a result.

Either way, the Chancellor’s Budget was deemed a surprising “tax and spend” one after months of her and Keir Starmer’s efforts to say there was limited room for manoeuvre given the legacy left to them by the Tories – a “£22 billion black hole” – and pledges not to “turn on the taps” of public spending.

Even the Guardian and the Mirror called it a “tax and spend” Budget, albeit from a different point of view – that this was good for public services or certainly an improvement on what had gone before.

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Meantime, the Mail and Express and their broadsheet brothers and sisters argued that enterprise, economic growth and wealth creation would be badly hit. All were concerned about the possibility of an increase in inheritance tax (on property, possessions and money), as this is the main way wealth is passed down the generations, from parents to children.

If there can be said to be a good side to the Budget, it was that this new Labour Government can be successfully subject to public pressure, albeit from the right as well as the left.

After a disastrous start to its first term of office in more than a decade, Labour did sense the need to placate many angry citizens. Out of the rabbit’smagician’s hat, Reeves produced the idea she could loosen those self-imposed rules on spending and definitions of debt.

But if we step away from these more immediate concerns, there is a bigger and longer-term picture to be seen. This concerns the current and continuing consensus between Labour and the Tories on matters of the economy.

“Fiscal responsibility” has been the motto of Reeves in her time as shadow chancellor of the exchequer and now as Chancellor. She has stated she will be an “iron chancellor” in applying “fiscal responsibility”.

And, Reeves, like Starmer himself, believes that “fiscal responsibility” – as determined by the international money markets – is the only route to economic growth because it provides the investors, hedge funds, private equity operators and the like with financial stability and reassurance on their terms.

With economic growth and no runs on the pound or disinvestment, there is then more revenue to tax so that the resources are created for funding public services. This, the argument goes, does not then require raising taxes, whether in a progressive or regressive way, and it certainly does not require any redistribution of wealth.

This was also the policy of Tony Blair and Gordon Brown in the “New” Labour era. Brown’s favourite phrase was “fiscal prudence” and he also pledged to be an “iron chancellor”.

It was on this basis that The Economist, the right-wing political weekly, last year created the portmanteau of “Ms Heeves”, the combining of Reeves and previous Tory chancellor Jeremy Hunt.

The use of the term portmanteau is derived from the name given to a large travelling bag, opening into two equal parts. In time, “Ms Heeves” has developed into an ideology called Heevesianism. So, despite the Tories being out of office, nonetheless, their legacy carries on in an active way.

What makes the creation of the Ms Heeves portmanteau so significant is that in 1954, The Economist created the portmanteau of Mr Butskell from the names of Tory chancellor Rab Butler (1951-55) and Labour chancellor, Hugh Gaitskell (1950-51). Shortly thereafter, Butskellism came into being.

This was because Butler largely followed the economic policies of his Gaitskell, by pursuing a mixed economy and Keynesian economics as part of the post-war consensus.

This was made all the easier by Gaitskell being on the right wing of Labour so that he was closer to Butler than the likes of Aneurin Bevan and other left-wingers who resigned from the Labour Cabinet when Gaitskell introduced charges for NHS dentistry and optometry in 1951. Butler extended these charges the following year.

As with Hunt and Reeves, the differences between Butler and Gaitskell were relatively minor in the scheme of things. Butler had more interest in using monetary policy whereas Gaitskell was more inclined to use exchange controls.

Of course, the post-war consensus was based upon state intervention to right some of the wrongs of the free market.

In smashing this consensus, Thatcher shifted the centre of political gravity rightwards which Labour then followed. In other words, historically, Labour and Tories have had more often than not the same overall economic perspective. Any variations have but been variations on the same theme.  

Professor Gregor Gall is a research associate at the University of Glasgow and editor of A New Scotland: Building An Equal, Fair And Sustainable Society (Pluto Press, 2022)