Not yet a listening Government: Consultations arising from the Reeves Budget

This is Blog no 83

The word ‘consultation’ did not cross Rachel Reeves’ lips. Not once.

Curious, but not really significant. Chancellors like to show themselves to be willing to listen to key stakeholders and normally announce three or four consultations when they deliver the set-piece speech.

Gordon Brown once managed ten. George Osborne was also prone to do so and probably now regrets not having consulted on the fabled ‘pastie tax’. Their many successors have also announced the odd consultation and initiated countless others which we then encounter in the days following the Budget.

This is no exception. However, delve into the 100 odd supporting documents that accompany the Budget – click here to see them all – and there are all kinds of announcements ranging from details of how the new NHS money will be spent to a policy on tax for ‘enveloped dwellings’, whatever they might be. There is the widely expected detail of levying VAT on private schools and rather a lot on tax avoidance and those who promote it. This is where you will find the new rates of air passenger duty and even a discussion paper on transforming business rates. In fact, all political life is here – enough to keep the geeks occupied till Christmas… at least.

In fact, there is barely a single item that will not have involved civil servants in some form of stakeholder engagement – much of which is routine, below the radar stuff, usually denounced as unnecessarily secretive by anyone who doesn’t like the outcome. Some reflect consultations that have now closed. This is where you bury a previous Government’s less glorious initiatives. In the spring, Jeremy Hunt’s idea to appeal to the uber-nationalists flirting with the Reform Party was a ‘British ISA’. Starting in March there was a consultation; the new Government has (wisely?) killed it.

There are eight new consultations, not one of them politically significant. They will matter to some people – especially if you are ‘cryptoasset service provider’ or help people with the complex provisions of inheritance tax. And there will be another 20 published in the coming months. This is normal. Technical dialogues with professional experts on specialist subjects. They are styled public consultations so that no-one is excluded, and presumably retired civil service mandarins, academics and trade bodies are encouraged to contribute their thoughts. No Government minister is going to lose sleep worrying that adverse reactions to his or her proposals will jeopardise their political legacy.

But as we all know, Governments get into trouble when they motor ahead when perhaps they should have paused for thought … and consulted.

The main reason why there is no mention of consultation in this Budget is that a new Government is freshly legitimised by its own Manifesto. Much of the Labour manifesto will have been chewed over by working parties, opposition spokespeople, policy ‘wonks’ and those that now find themselves as Special Advisers or SPADs. Any debates or policy wrinkles were sorted, so job done. Why consult?  As I argued back in July in Blog 74, it’s a new, confident Government and knows what it wants to do … and quickly. If it’s in the Manifesto, don’t hang about. Just do it.

But life is seldom that simple and it’s only a matter of time before the contextual situation changes or something arises that was not envisaged in the Manifesto and Ministers make a judgement call. To consult or not?

For Rachel Reeves, that decision-point came rather quickly. Would she have been wiser not to announce the partial withdrawal of the Winter Fuel Allowance before undertaking some form of consultation?  Would she have stood a better chance of explaining her dilemma and the trade-offs she and her colleagues were having to consider, had she shared the arguments with the British public?  Or were they in too much of hurry to demonstrate a macho-willingness to take ‘difficult decisions’ to the financial markets – or to Daily Mail readers?

Right now, a Scottish couple has been given permission to proceed with a legal challenge to the decision on winter fuel, arguing that there was insufficient consultation and that there had been no Equality Impact Assessment. Regardless of the outcome when the Court of Sessions hears this case in the New Year, it nicely poses a question that all Chancellors need to consider. What is the impact?

It comes in many forms. There will be the impact on the nation’s finances. The impact on household budgets.

The impact on people’s health and wellbeing. And the great virtue of consultation is that few of these calculations are an exact science. Predicting the future is a speculation and there are many opinions. Consultees often have more insight and credibility than officials working under pressure behind desks in Whitehall, and in this case we know that older people’s charities and the fuel poverty lobby are issuing dire warnings about the consequences of withdrawing this benefit. Even a rapid, stakeholder-oriented consultation for four weeks might have been a useful exercise for the Treasury.

It might not have changed the Government decision. But it might have affected another form of impact – political impact. For, in retrospect, the Chancellor is seen to have squandered a good deal of political goodwill in the manner of her decision. There may be a logic in assuming a mandate for Manifesto commitments. But issues and decisions beyond a Manifesto require deft political handling, and this was at best a thoughtless oversight, and at worst a classic case of political bungling.

There is still time for Rachel Reeves to grow into her difficult role, and that might involve learning when to consult and when to listen to stakeholder views. To do so would be a sign of strength, not weakness.

Rhion H Jones LL.B

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