ALEX BRUMMER: Rachel Reeves’ plan to ‘gold-plate’ OBR Budget scrutiny is not a radical new deal
- Reeves promises ‘permanent tax and spending changes’ will get OBR scrutiny
- She says Labour will commit to single budget by end of November each year
- But the notion that this is some radical new deal needs to be scotched
Labour used the anniversary of Liz Truss’s explosive mini-Budget to gold-plate the role of the Office for Budget Responsibility.
Unlike austerity, the creation of the independent OBR is one George Osborne initiative which Rachel Reeves can support.
The shadow chancellor promises to put into law that ‘permanent tax and spending changes’ will be subject to OBR scrutiny.
Planning: Rachel Reeves promises to put into law that ‘permanent tax and spending changes’ will be subject to OBR scrutiny
What Reeves didn’t mention was that the OBR did offer to do a speedy assessment of the Truss-Kwasi Kwarteng tax and spending commitments but the proposal was rejected.
The Tory Right believe that the OBR is the Treasury in disguise. Truss and Kwarteng didn’t want it marking their homework.
The refusal to give the OBR a look in was among the reasons that the yields on gilt-edged stock exploded, triggering the crisis which forced the sacking of then chancellor Kwarteng and the swift resignation of the PM.
Neither of them (nor, one would suggest, the OBR) could have anticipated that the pension funds had become casinos by turning UK bonds, one of the safest assets on the planet, into derivatives known as liability driven investments (LDIs).
Reeves says that Labour will commit to a single budget by the end of November each year, giving families and business time to plan before the start of the fiscal year in April. The notion that this is some radical new deal needs to be scotched.
The word ‘permanent’ is critical to Reeves’s statement
It was her Labour predecessor Gordon Brown who invented the concept of the pre-budget report in November for precisely that reason.
When Brown announced a huge out-of-sequence expansion of spending on the NHS (later to be paid for by a 1 per cent surcharge on national insurance) it largely was about spiking Sir Tony Blair’s guns.
The word ‘permanent’ is critical to Reeves’s statement. It would allow a Labour chancellor to follow in the footsteps of Rishi Sunak with the furlough scheme in Covid and Truss with her energy subsidy after Russia’s war on Ukraine.
A Labour chancellor will still be able to make policy on the hoof without consulting the OBR.
Plus ca change, plus c’est la meme chose.
Sentry duty
Microsoft boss Brad Smith finally looks to have overcome the rightful opposition of Britain’s Competition and Markets Authority to the tech giant’s £60bn takeover of Call of Duty gaming outfit Activision Blizzard.
The breakthrough came when Activision pledged to sell its cloud streaming rights to French gaming rival Ubisoft. Victory for Microsoft may now be in sight but Smith has won few friends through his public attack on the CMA and Britain.
There are still questions to be asked about the Ubisoft arrangements and whether it is wise for so much power over the gaming world to be in so few hands
His over-the-top criticisms of the UK process has been an own goal, costing Microsoft millions of pounds in legal fees. By objecting to the original deal, the CMA and its chief executive Sarah Cardell raised universal concerns about the wish of Big Tech to the rule the world.
Previous Silicon Valley takeovers have often been a substitute for new ideas and an attempt to dominate markets.
There are still questions to be asked about the Ubisoft arrangements and whether it is wise for so much power over the gaming world to be in so few hands.
Fear that open architecture would be destroyed prevented Nvidia from buying Arm Holdings. The EU is coming down hard on Google over its alleged abuse of ad technology to dominate the commercials space.
The Microsoft deal threatens to smother an infant creative business, weakening the ability of game innovators to reach markets.
Microsoft has won a narrow victory. In the process Smith and the company have done considerable reputational damage.
Opening bell
Saudi Arabia’s sovereign wealth fund PIF likes nothing better than a punch-up – as we saw when its LIV golf franchise waved the dollar bills and took effective control of the US PGA tour.
It now has its sights on wrestling and the mixed martial arts champion Ultimate Fighting League. The chosen weapon is the smaller Professional Fighters League (PFL) into which it has sunk $100m.
As with golf – brought up by Phil Mickelson – a Saudi controlled PFL could change the economics by tempting big-name fighters with contracts beyond the dreams of avarice.
The attraction of mixed martial arts is the relatively small number of under 1,000 competitors which makes domination possible.
Let combat begin.
