Britain’s Tory rulers set the weather for Labour’s fiscal policy

In her speech to the Labour Party conference in Liverpool on October 9th, Rachel Reeves, the shadow chancellor, pledged “iron discipline” on . A few of the Labour Party’s preferred villains—such as private schools, large tech firms and energy companies—would pay a bit more tax if Ms Reeves were to move into 11 Downing Street after the next election. But the overall shape of public spending and taxation, at least on day-to-day spending, would be very similar to that planned by the Tory chancellor, Jeremy Hunt.Ms Reeves is bearing out a political theory associated with one of Labour’s bêtes noires: George Osborne, the Tory chancellor between 2010 and 2016. Long before he was chancellor Mr Osborne had worked as a political strategist. One lesson he drew then from the Conservative defeats of 2001 and 2005 was the “baseline theory of politics”. The medium-term fiscal plans set out in the government’s budget are often notional—economic circumstances change. But the media and voters would still treat these numbers as the starting-point for any discussion of fiscal policy. Any proposed deviation from that baseline, justified or not, would be heavily scrutinised.