Writing things down is a deliberate act in politics. Ed Balls boasted in our New Labour Years class at King’s College London that there are no documents in the National Archives with his name on them as an adviser to Gordon Brown. All the important business was done face-to-face or on the phone, and civil servants would write down what had been decided.
Being careful about writing things down was a rule tested to destruction by the spread of texting and especially WhatsApp, as the embarrassing and expletive-strewn disclosures of Dominic Cummings’s successful campaign to destroy Boris Johnson showed.
So when a cabinet minister writes things down and sends a letter to another cabinet minister, the first question we should ask is: what did she mean by that?
Two months ago, ahead of the spring statement, Angela Rayner, the deputy prime minister, wrote a document entitled “Alternative proposals for raising revenue” and sent it to Rachel Reeves, the chancellor. What she meant by that is: “This is a mini-manifesto that might be leaked later.”
The 1,000-word document is a work of some skill. It was a carefully calibrated act of rebellion. Ministers are not supposed to write to their colleagues with helpful ideas outside their area unless invited to do so. Reeves will have been furious to have received it, and Keir Starmer would have been irritated to have been copied in.
The chancellor had already decided not to announce tax rises at the spring statement: all the burden of getting the public finances back within her fiscal rules would fall on the welfare budget.
But Rayner knew that Reeves will almost certainly have to put up taxes in the Budget in October – something that is even more true now that she has to find the money to pay for the U-turn on winter fuel payments.
And Rayner knew that the Treasury’s first port of call would be small tax rises on the rich. The sort of thing that Reeves could sell as a regrettable necessity, but a burden that would be borne by those with the broadest shoulders.
So, by suggesting eight fiddly tax changes that together would raise a decent chunk of money, Rayner positioned herself ahead of where the chancellor is likely to be in a few months’ time. Thus, she is inoculated against the charge of disloyalty while winning favour with Labour members who want to soak the rich.
In a remarkable exercise in shadow policymaking, Rayner’s proposals read as if they had been drafted by Treasury officials for the chancellor.
Some of the proposals look sensible to me. It is absurd – and, presumably, the legacy of some headline-grabbing tax incentive from decades past – that shares in one class of companies should attract a lower rate of inheritance tax. So Rayner’s plan to remove that tax perk from shareholdings in smaller companies listed on AIM, the Alternative Investment Market, a sub-market of the London Stock Exchange, is a good one.
It wouldn’t raise as much as Rayner claimed, and some of her other ideas are not so good. She suggested reinstating a pensions lifetime allowance that Jeremy Hunt abolished as chancellor to try to get NHS consultants back to work; reversing it would drive them away again.
It would be better to cut back other tax reliefs for private pensions of the better-off, and I think that the case for some form of mansion tax on more expensive properties is irresistible. But this is about sending a message. The merits and demerits of Rayner’s detailed suggestions are less important than the level of detail and the modesty and realism of her plan.
No wild talk of a wealth tax, which most economists regard as unworkable, but a brazen piece of positioning, reminding those Labour members and Labour MPs who hanker for the simplicity of a wealth tax that there is someone at the top of government who wants the same things that they want but is clever about it.
I have been hearing good things recently about how effective Rayner is behind the scenes, and this is a reminder that she understands how to operate the machinery of government better than anyone else in the cabinet.
It is not too fanciful to see the Starmer-Reeves U-turn on winter fuel payments as a response to Rayner’s power in the party. With Labour MPs up in arms over “cuts”, everyone knows that there is an alternative leadership waiting in the wings of government. This is an overstatement, although there is truth in it: Starmer and Reeves are in office, but Rayner is in power.
