Was Rayner’s leaked memo an early play for party leader?
Rayner’s ‘leaked’ memo was a reminder that she is cut from different stuff than our iron Chancellor, but was it strategic, asks Eliot Wilson
Last week a “leaked” memorandum from the deputy prime minister, Angela Rayner, to the chancellor of the Exchequer, Rachel Reeves, emerged in the media. Written before March’s Spring Statement, it was entitled “Alternative proposals for raising revenue” and contained suggestions for shoring up the public finances in the wake of a much-reduced growth forecast from the Office for Budget Responsibility.
Broadly speaking, Rayner’s suggestions focused on increasing taxation rather than cutting public spending, the approach the chancellor favoured. Reeves announced £5bn in cuts to the welfare budget and a review of Personal Independence Payments (PIP), a 15 per cent reduction in the cost of the civil service, the near-halving of overseas aid to fund increased defence spending and the abolition of NHS England.
It is easy to forget that Starmer is surrounded by colleagues at least a generation below him
Reeves came to the Treasury last year as a sombre Bank of England economist who would take tough but correct decisions to restore the health of the British economy and increase growth. She had embraced the image of being an “iron chancellor” while still in opposition, for a while managing to turn her dourness and lack of charisma into a virtue. The stubborn refusal of the economy to expand, combined with the unravelling of her own curriculum vitae, has left her seeming powerless and potentially expendable.
Rayner is cut from different cloth than Reeves
Rayner does not come from the same part of the Labour family as the Chancellor. She rose through the trade union movement, working as an official for Unison, the giant public service union, and sees herself as “soft left”. During the Corbyn era, she told an interviewer “I’m interested in how we can change lives for the better; how we can we put socialism into practice”. Rayner served as Corbyn’s shadow education secretary, while Reeves left the front bench and became chair of the House of Commons Business Committee.
The memorandum reflected this difference of approach and instinct. Rayner proposed removing inheritance tax relief for AIM shares, reinstating a pensions lifetime allowance, scrapping the tax-free allowance for dividends and increasing the rate of taxation paid on them, freezing the threshold above which the 45 per cent rate of income tax applies and raising the rate of corporation tax paid by banks. It was aimed directly, unerringly at the better off and investors, while Reeves’s savings seemed to target “traditional” Labour voters.
When is a leak not a leak? When it’s a strategic release of information. It is easy to forget that Sir Keir Starmer will celebrate his 63rd birthday this year, while Rayner is 45 and Reeves is 46. (Ambitious health secretary Wes Streeting is 42.) Despite the Prime Minister’s record-breaking lack of popularity, few seriously think his position is under immediate threat, but age means he will not be Labour’s leader forever, and he is surrounded by colleagues at least a generation below him.
It is perfectly possible that Labour will fail to win the next general election. Such an outcome would surely see Starmer quit the field, leaving “Starmerism”, insofar as his halting, tin-eared, managerial approach can be regarded as an “-ism”, discredited. In the wake of defeat, or even failure to win, the party would face a profound internal conversation about the nature, purpose and priorities of the movement. Who is it for? What kind of society does it want to create?
Does Angela Rayner want to lead the party?
Does Angela Rayner want to lead her party one day? The likeliest answer is “maybe”. Ambition does not consume her and she has already chafed at media intrusion into her private life. But she knows she has substantial support in the trades unions, and as deputy leader of the Labour Party she could be forgiven for feeling marginalised and aggrieved by the status quo. Some observers suggest she might put aside her reservations if the neo-Blairite Streeting edged towards the crown.
Rayner’s memorandum can be seen as an ideological ranging shot. It shows that she is uncomfortable with some of the policies the government is pursuing and that they run counter to her sense of socialism. It creates distance. And it demonstrates, at virtually no political cost, that she would rather squeeze higher earners and the private sector for more revenue than reduce public expenditure to balance the nation’s books. If she ever finds herself in a leadership race, the leaked memorandum will serve as an early signpost of the kind of politician she really is.
Eliot Wilson is a City PM columnist and contributing editor to Defence on the Brink