Labour has made its big play. Are you not convinced?

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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Are you not entertained? Because, frankly, you’ve now seen the show. This is, finally, the big plan voters have waited nearly a year to see. After hefty tax rises and some political mis-steps, this was the moment Rachel Reeves stood in the Commons arena — arms not quite aloft but eyes blazing defiance — daring her MPs and the country not to applaud a chancellor delivering the change they both demanded and were promised.

So were we entertained? Or to put it another way, are we convinced? If this is the plan — and it needs to be because the spending she set out on Wednesday is for the duration of this parliament — her story has to hook the country.

The first thing to say is that there were several good things in the statement — just as well given the level of borrowing involved. Labour’s central economic and political argument is that its mission is to invest in the fabric of the nation. The closest it comes to an economic strategy is its belief in an investment-led recovery primed by spending on infrastructure. The need for more capital spending is unarguable. From reservoirs to railways, the UK has lost the art of building. Long promised projects vanished into the mists of Brexit, the pandemic and the politics of empty announcements.

One can argue about specific projects and the concerning overall levels of public debt but this £113bn investment splurge was a big step in an essential direction. Funding for transport, defence hardware, nuclear power stations and other energy investments and social housing was set out. Significant sums are going to regions beyond London in a revival of Boris Johnson’s pledge to “level up” the country, this time backed up by essential planning reform. These are big calls and Reeves and Keir Starmer deserve credit for them.

There are, however, three problems which stop the crowd rising to its feet. The first is that major capital projects take many years. The country is used to visions which are then snatched away when the money gets tight. The second is that while they wait for these necessary investments, voters still feel more immediate pain over the cost of living and fraying public services.

Comparisons to the austerity years of George Osborne are misconceived. Money has flowed into departments but at levels which Labour MPs fret do not match the need. They worry voters will not see gains from this investment in time, even as they feel the adverse consequences of tight day-to-day public spending.

One wonders if this settlement matches the public mood over crime and public order, for example? A government looking to send fewer people to prison has a police service which is seriously stretched and which cannot deter much lower level offending. Meanwhile, businesses will worry about a chancellor likely to find herself forced to raise more tax come the autumn to address those political fears.

Above all, the spending review assumes a level of effectiveness at finding savings and delivering reforms which this government has yet to show it possesses. Even with the magic bullet of AI, some of the promised efficiency savings look astounding: £9bn over three years in the health service alone; £13.8bn overall. Around £1bn in savings are assumed from a promise to close asylum hotels.

Implementation is going to be everything. Fixing the NHS is the main priority and, unsurprisingly, it is the major winner from the spending review. But almost a year in, we still await the 10-year NHS plan. A review of social care promises only that by 2026 it will offer ideas on how to make better use of existing money. Wes Streeting, the health secretary, is one of the few top-tier public performers in cabinet but we have yet to see if his walk can match his talk.

Defence too has done well (though still less well than many argue is necessary). But while cash will rise to match the growing threat, poor procurement remains one of the scandals of recent decades. The test will be whether this MoD can be more effective in how it spends the money than its predecessors.

One might further ask if the Labour party has the stomach for the welfare savings which are necessary. Recent retreats suggest not. Or whether the investment in skills training is enough to ensure the UK has the people to build what it plans to construct, given the clampdown on immigration. Critics can also point to the extra workplace regulation and tax rises on business which could stymie Labour’s growth agenda.

Even so, Reeves’ intent and instincts in trying to restrain current expenditure while investing in infrastructure are largely correct. But Labour’s political weaknesses remain those questions about implementation and its inability to weave a convincing story around these plans. Neither Reeves nor Starmer command public trust, nor are they gifted storytellers. Unlike Russell Crowe’s gladiator, they do not do spectacle.

It is therefore possible that we will look back ruefully on this government as one which did many essential things but was never able to bank the political credit. Labour is going to have to hope that enough of this spending punctures public consciousness in the next four years to allow it to argue that the country has turned a corner.

Labour has made its big play. It is a decent plan but it is now down to the execution. If we are not immediately convinced, it may be because up till now they have not looked that convincing.

robert.shrimsley@ft.com