Rachel Reeves is the Labour Party's weakest link

Have you ever thought about why we experience potholes, deteriorating infrastructure, schools requiring renovation, and lack of funds for maintenance or improvements? The explanation can be pointed towards the regulations in the Treasury that we have brought upon ourselves.

I had the opportunity to give a speech at a business gathering situated in a gleaming establishment possessed by a top-tier accounting and consulting firm. In the question and answer portion, someone asked me if I thought there would be a significant contrast between Rachel Reeves and my administration. To be honest, my reply was that there would only be a minor distinction.

Reeves transitioned to politics after her employment at the Bank of England and HSBC's retail division. However, she appears to lack creativity and originality, comparable to that of an inanimate lamp post. My estimation is that, if the Labour party wins the elections, Reeves will be the most feeble link in their new government.

Not many administrations are ready or capable of dominating and managing financial matters. They seldom have the courage to alter rules that are biased and question common beliefs. In the present era, with both the Office for Budget Responsibility and numerous economic organizations always ready to make predictions, which are often misguided, a finance minister must have the strength to hold their ground.

Looking ahead, it's important that our next chancellor is not simply a puppet controlled by others. We need someone who is willing to take charge of the Treasury and move it forward with the times. While Gordon Brown was skilled at managing the Treasury, his policies were ultimately flawed. We need a leader who can create better rules for our economy.

Let's consider how the government finances their spending obligations and departments. Over the last two decades, there has been a separation of public expenditure into two categories: capital spending, abbreviated as "CDEL," and operational spending, commonly referred to as "RDEL." According to the "golden rule" put forth by Gordon Brown, we are only permitted to borrow for capital spending and not for the everyday functions of the government. Although the monetary regulations have been revised several occasions, the Treasury maintains a significant partiality to this stipulation.

Seems reasonable, right? However, nowadays, expenses for running a business are not limited to employee benefits and salaries. It also covers renovations, upkeep, software advancements, and various expenditures with vague definitions. For example, in the Defense industry, purchasing ammunition and bullets are classified as everyday expenses according to the Treasury.

What does this mean? Ministers receive large amounts of money, either from money that was not spent in previous budgets or from borrowing. However, they do not receive any money to maintain the projects they fund, such as hospitals, ships, roads, and flood defences. Ministers and admirals are excited about new projects, but they do not consider the long-term consequences or the expenses to maintain them. This is why there is always enough money to build new structures, but very little money to maintain them afterwards.

There is a significant need for significant changes to be made in this area. It leads to improper actions, and when salaries and retirement funds increase, it creates a situation where departments are constantly spending more on capital projects and have less money available for upkeep.

You might be wondering how Gordon Brown managed to endure this situation. It's only logical to assume he was also feeling frustrated. However, he had a secret weapon in his arsenal. Three letters that would help him bend the rules in his favor – PFI. These are small amounts of money, both in revenue and investment, bundled together in a tidy, off-the-books package, with a fancy and costly bow.

PFI (Private Finance Initiative) was used everywhere. The Defence sector implemented PFI for air-to-air refuelling and removed it from their financial records. This was also done for accommodation, tank storage, and head office management. The use of PFI continued without pause and people repeated the phrase "it's the only game in town" to support it. Unfortunately, we only delayed paying for the costs and ignored the issues with the Treasury's regulations.

It's possible that Tony Blair was onto something with his confidential proposal in 2005 to divide the Treasury into two separate entities. One would focus on finance while the other would concentrate on enhancing economic growth. There are already examples of this approach in countries like Denmark. What we really need in the government is an agent of progress and creativity instead of someone who obstructs progress by imposing ambiguous and unexplainable regulations, such as the "golden rule," "value for money," and "international accounting rules." Whenever I asked for clarification on these terms, they always fell apart under scrutiny.

In order to generate wealth in our country, we need to alter the current norms and beliefs. The upcoming chancellor needs to break free from the limitations imposed by the previous chancellor and focus on encouraging enterprise, growth, and investments in the economy. The old, one-dimensional approach is not sufficient and we need to move beyond it. However, it is unlikely that significant change will occur under Reeves' leadership, as it would be more exciting to watch a road being constructed than to expect action from them.