There is a particular look on a Chancellor’s face, in the closing minutes of a Spring Statement, that you only really see if you have watched a few.
It is the look of a person who has just got away with something. The eyes drift up; the shoulders drop; the back of the dispatch box gets a little lean-back; the well-rehearsed peroration about working people and stability and growth is delivered with the slightly distracted air of a person already rewinding for the live interviews on the College Green. We saw that look yesterday. It told you everything you needed to know.
Because here is what Rachel Reeves did not announce.
She did not announce a real cut to business rates for hospitality. She did not announce an end to the gradual erosion of inheritance tax relief on family business and farms, which has now been quietly tightened in three successive fiscal events under different titles. She did not announce a freeze on employer National Insurance, despite a year of pleading from every employers’ body in the country. She did not produce the long-promised reform of the apprenticeship levy. She did not, despite frantic pre-briefing about a “Cities of Growth” initiative, deliver anything to the medium-sized industrial heartland between Hull and Stoke that the country has been begging her to address.
She did do the following. She nudged the dividend allowance down, again, by a hundred pounds. She produced an additional bond issuance for the British Business Bank with a tag of £400 million, much of which will, on past form, end up subsidising tier-one consultancies operating as “delivery partners”. She extended Making Tax Digital to landlords below the £30,000 threshold, which will, by the OBR’s own number, raise £85 million while costing the affected SMEs about £350 million in compliance fees. She announced a new tax-incentivised vehicle for private-credit funds to invest in “regional infrastructure”, which, deciphered, means London and the South-East with a press release.
This was not a Spring Statement. It was an interest payment, in the currency of British political theatre, on a debt the Chancellor knows she will have to roll over again in the autumn. The “markets”, that great anonymous chorus before whom we all curtsey now, will give her a brief golf clap, gilts will hold steady, the Office for Budget Responsibility will publish a polite forecast, and the country will be back in this same chair in November.
What infuriates me, frankly, is the missed opportunity. The Chancellor had, in front of her, three measures any of which would have cost less than the Whitehall press operation already spends on her itinerary, and which would have changed the temperature of British business meaningfully. A single per-cent cut to employer NIC for firms below £10m turnover. A statutory commitment that no further changes to entrepreneurs’ relief or BPR would happen this Parliament. A 12.5 per cent VAT band for hospitality, paid for by removing the capital allowance on warehouse build-out. None of these things were taken. None of them were even seriously considered, on the evidence of the Treasury Red Book.
Why? Because Rachel Reeves, like every Chancellor who came before her, has discovered that the path of least resistance through any fiscal event is to find a fresh set of pockets in the upper-middle of the British economy and pat them down for change. Small landlords. Mid-sized employers. Family farms. Family pubs. The classic profile is unmistakeable: high enough to have something worth taking, fragmented enough not to organise, busy enough not to march. There are no rallies in Parliament Square for a £4,200 NIC bill. There ought to be.
I do not, before this column slips into pure complaint, suggest that the Chancellor’s constraints are imaginary. They are real. Borrowing costs are real. The bond markets are real. Demographics are real. Adult social care is real. Defence procurement is real, and large. I am not asking her to perform a magic trick. I am asking her to stop performing a different magic trick, the one where she pulls another £1.5 billion of revenue out of the SME hat each March without anyone noticing, and to begin actually framing fiscal policy around the question of how Britain produces the growth it requires.
Because if she carries on like this, the answer to that question becomes painfully simple. Britain doesn’t. It is produced for us, somewhere else, by economies which are, by accident of policy, more friendly to those who try to make things work.
We are not, I promise the Chancellor, an inexhaustible resource. There is a limit, even to British forbearance. Yesterday, in the gap between her sit-down and the Speaker’s standing-up, we got a glimpse of it.
