Rachel Reeves, the chancellor, tried to imitate James Callaghan in an interview this weekend. She told the BBC: “We can’t tax and spend our way to higher living standards and better public services. That’s not available in the world we live in today.”
The echo is unmistakable of Prime Minister Callaghan telling the Labour conference in 1976: “We used to think that you could spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candour that that option no longer exists.”
