‘The way we find more money is to grow the economy’ – Chief Secretary to the Treasury

We spoke to Darren Jones, the Chief Secretary to the Treasury.

Krishnan Guru-Murthy: Let’s just begin with that point Helia was making about this new guarantee that the OBR will always look into budgets. It prevents anything happening like the Liz Truss mini-budget again. But who are you controlling? You weren’t going to do that, were you? It’s just politics is my point.

Darren Jones: No, because we are giving new legal powers to the fiscal watchdog to ensure that whoever is in government at any point in the future, they can’t repeat the mistakes that Liz Truss and the Conservatives made when they crashed the economy, put the country’s finances and family finances at risk.

Krishnan Guru-Murthy: So you are trying to bind any successor?

Darren Jones: But also setting out the expected behaviour that the public can expect from a Labour government, where fiscal discipline is at the foundation of everything that we will do.

Krishnan Guru-Murthy: What about the question that giving the OBR such importance limits investment, and you’ve got to try and find that money somewhere else? Are you going to change any of the fiscal rules that keep us in this straitjacket?

Darren Jones: Investors tell us the reason they can’t spend money in the UK is not because of the Office for Budget Responsibility. It’s because the planning system needs to be reformed. We need clear prioritisation around the country’s needs. We need the skills and the labour market to be able to deliver the types of infrastructure we want to be invested in. And you’ve seen in the number of bills in the King’s Speech today, our plans to bring forward those reforms alongside this ability of the economy to unlock the investment the country needs.

Krishnan Guru-Murthy: There’s been a lot of speculation that you might be able to find some money by tinkering around the rules involving the Bank of England, the interest that is paid to banks overnight and also the amount of quantitative tightening, the reversing of quantitative easing that is going on. Is that all being considered at the moment as a way of finding more?

Darren Jones: No, we’ve been very clear. The way in which we find more money to spend on public services is by growing the economy. If the UK had grown at the average rates of the wealthy nations over the past 14 years, this year I would have another £50 billion to spend on schools or hospitals or policing.

Krishnan Guru-Murthy: So no freeze on tightening?

Darren Jones: Our focus is absolutely on growth. That’s the way to release more money for public services.

Krishnan Guru-Murthy: But is that ruling out a freeze in the tightening that the Bank of England…

Darren Jones: The chancellor has already said in TV interviews that we’re not planning on tinkering with policies in that way. We’re going to do the proper hard work. Yes, with the hard decisions to start with, but an absolute focus on growth, to give sustainable revenue to the exchequer for public services.

Krishnan Guru-Murthy: As chief secretary, you’ve got to work out how much each department’s going to get. You’re going to have to do the spending review. How long into the future is that spending review going to cover? Because if it’s just one year, that’s very short-term decision making, isn’t it? Don’t you need to go longer than that?

Darren Jones: The official answer I can only give you, I’m afraid this evening, is the chancellor is going to make a statement to parliament, which is the proper way these things should be done. I knew the Tories didn’t do that, but we’re going to do things by the book because the adults are back in the room. The chancellor will make that statement to parliament before the summer, both setting out the inheritance from the Conservatives, but also confirming the date for the next Labour budget and the spending review.

Krishnan Guru-Murthy: But would you agree the adult thing to do is to take longer term decisions? Not just confine people to 12 month spending decisions.

Darren Jones: We were clear in the manifesto, we want to get back to a normal multi-year settlement for public services, a longer term view on capital investment in research and development, and you’ll see that coming forward from us. But the precise details will be announced by the chancellor to parliament before the summer.

Krishnan Guru-Murthy: The message today is everything is going to take a long time. What you’re really saying to us is that we’re going to have to put up with bad public services for a lot longer, and you’ll just keep blaming the last government. When are things actually going to change, is the question in most people’s minds.

Darren Jones: Everybody knows there are some things you can do that are quick, some things that will take longer to do. In our first week and a half in government, we’ve already, for example, lifted the ban on onshore wind turbines. We’ve created the national wealth fund. We’ve unblocked planning disputes around housing development in our country. We did that within the first week. The legislation was set out today where we need to pass bills in parliament to change the law, will obviously take a bit of time to get through…

Krishnan Guru-Murthy: But we might still face a winter crisis in the NHS, won’t we? You can’t fix that overnight.

Darren Jones: Sure, but we’re working to try to make sure that’s obviously not the case. But you’re right that structural reforms will take some time, not least because of the financial inheritance we’ve had from the Conservatives. It will be hard to begin with, but we’re not shying away from taking the bold and tough decisions to fix these structural problems in the country.

Krishnan Guru-Murthy: Do you think we will feel change this year?

Darren Jones: I think people are feeling change already.

Krishnan Guru-Murthy: That’s not real though, isn’t it, that’s just a sense of optimism.

Darren Jones: You asked me if people were feeling change. I think the public are feeling optimistic about a Labour government being in the driving seat in our country, setting out now in the momentum we have about our absolute focus on delivering the promises we made at this election.

Krishnan Guru-Murthy: Can you also clear up a story that’s doing the rounds in a lot of the newspapers at the moment, which is about Sue Gray, Keir Starmer’s chief of staff. There is a suggestion that she is in some way getting very involved, or over-involved, in a spending decision to do with a derelict stadium in Northern Ireland. You’re the man who has to take these decisions on spending. Has she been talking to you? Is there any truth to the story?

Darren Jones: I speak with Sue Gray, but I speak with other members of staff and other colleagues who are ministers, of course, but spending decisions are taken by ministers and primarily by me.

Krishnan Guru-Murthy: So there’s nothing untoward going on?

Darren Jones: Not at all. No.