Could higher borrowing give Rachel Reeves her optimistic vision?
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.
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.
Politics live: ‘More optimistic’ Budget could be in store
The easiest way to see the change is to compare the chancellor’s actions before and after the summer.
In July, when Ms Reeves created the £22bn “black hole”, she gave us a taste of how she intended to fill it.
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.
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This was as striking as it was confusing. Such projects would be the cornerstone of any government’s growth plan.
Yet in the eternal tension in Labour between fiscal discipline and growth, the former had won out seemingly at the expense of the latter.
And Treasury mandarins at the time were clear. The best way to fill an immediate £22bn black hole would always be to delay or can these investments – or capital projects.
Now fast forward to the Autumn and £16bn of the black hole remains to be filled on 30 October.
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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.
This is by no means certain – the government’s first fiscal rule could yet prevent this from happening.
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.
This is just one of the ways that the government may allow itself to borrow more.
There is the well-trailed discussion about redefining debt in the second fiscal rule – a technical change that could free up £15bn or more.
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.
The markets are unlikely to take fright. They have been convinced, it seems, by the vibe of Ms Reeves as an iron chancellor.
However, there is now a chance the optimistic vision she outlined today could come sooner than we think – thanks to higher borrowing.
The crypto community is missing the opportunity to reimagine rather than transpose rulemaking for financial services. More technologists must join the regulatory conversation.
Whitehall officials tried to convince Michael Gove to go to court to cover up the grooming scandal in 2011, Sky News can reveal.
Dominic Cummings, who was working for Lord Gove at the time, has told Sky News that officials in the Department for Education (DfE) wanted to help efforts by Rotherham Council to stop a national newspaper from exposing the scandal.
In an interview with Sky News, Mr Cummings said that officials wanted a “total cover-up”.
Politics latest: Grooming gangs findings unveiled
The revelation shines a light on the institutional reluctance of some key officials in central government to publicly highlight the grooming gang scandal.
In 2011, Rotherham Council approached the Department for Education asking for help following inquiries by The Times. The paper’s then chief reporter, the late Andrew Norfolk, was asking about sexual abuse and trafficking of children in Rotherham.
The council went to Lord Gove’s Department for Education for help. Officials considered the request and then recommended to Lord Gove’s office that the minister back a judicial review which might, if successful, stop The Times publishing the story.
Lord Gove rejected the request on the advice of Mr Cummings. Sources have independently confirmed Mr Cummings’ account.
Education Secretary Michael Gove in 2011. Pic: PA
Mr Cummings told Sky News: “Officials came to me in the Department of Education and said: ‘There’s this Times journalist who wants to write the story about these gangs. The local authority wants to judicially review it and stop The Times publishing the story’.
“So I went to Michael Gove and said: ‘This council is trying to actually stop this and they’re going to use judicial review. You should tell the council that far from siding with the council to stop The Times you will write to the judge and hand over a whole bunch of documents and actually blow up the council’s JR (judicial review).’
“Some officials wanted a total cover-up and were on the side of the council…
“They wanted to help the local council do the cover-up and stop The Times’ reporting, but other officials, including in the DfE private office, said this is completely outrageous and we should blow it up. Gove did, the judicial review got blown up, Norfolk stories ran.”
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Grooming gangs victim speaks out
The judicial review wanted by officials would have asked a judge to decide about the lawfulness of The Times’ publication plans and the consequences that would flow from this information entering the public domain.
A second source told Sky News that the advice from officials was to side with Rotherham Council and its attempts to stop publication of details it did not want in the public domain.
One of the motivations cited for stopping publication would be to prevent the identities of abused children entering the public domain.
There was also a fear that publication could set back the existing attempts to halt the scandal, although incidents of abuse continued for many years after these cases.
Sources suggested that there is also a natural risk aversion amongst officials to publicity of this sort.
Read more on grooming gangs:
What we do and don’t know from the data
A timeline of the scandal
Mr Cummings, who ran the Vote Leave Brexit campaign and was Boris Johnson’s right-hand man in Downing Street, has long pushed for a national inquiry into grooming gangs to expose failures at the heart of government.
He said the inquiry, announced today, “will be a total s**tshow for Whitehall because it will reveal how much Whitehall worked to try and cover up the whole thing.”
He also described Mr Johnson, with whom he has a long-standing animus, as a “moron’ for saying that money spent on inquiries into historic child sexual abuse had been “spaffed up the wall”.
Asked by Sky News political correspondent Liz Bates why he had not pushed for a public inquiry himself when he worked in Number 10 in 2019-20, Mr Cummings said Brexit and then COVID had taken precedence.
“There are a million things that I wanted to do but in 2019 we were dealing with the constitutional crisis,” he said.
The Department for Education and Rotherham Council have been approached for comment.
Gemini is set to receive approval from Malta, while Coinbase is expected to get the green light from Luxembourg, according to Reuters.
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