Will this be Keir Starmer’s Budget?

Keir Starmer’s mini-reshuffle of 10 Downing Street was widely interpreted as an assertion of prime ministerial power over Rachel Reeves, the chancellor. The key part of the jigsaw was the appointment of Darren Jones, previously Reeves’s deputy as chief secretary to the Treasury, to the new post of “chief secretary to the prime minister”, based in No 10.

At the same time, Starmer brought in Dan York-Smith, a Treasury official, to be his closest civil servant, principal private secretary, and appointed an economic adviser, Minouche Shafik, a former deputy governor of the Bank of England – not having had one until now.

Does this mean that the prime minister is beefing up his team in order to put his mark on the forthcoming Budget – in which the government is under intense pressure to break its manifesto promises by raising one of the main taxes and to cut public spending?

Conventionally, the main Budget decisions are taken jointly by the prime minister – who retains the historical title of first lord of the Treasury – and the chancellor. But in practice, the balance of power between Nos 10 and 11 can tilt one way or the other.

Tony Blair was once reduced, only half-jokingly, to pleading with Gordon Brown to “give us a clue” as to what might be in a Budget that was only a few days away.

David Cameron and George Osborne had a more harmonious relationship, although it was complicated most of the time by the need to consult the Liberal Democrats.

Starmer and Reeves have presented themselves as being towards the Cameron-Osborne end of the scale of good relations, but there have been murmurings about Starmer blaming Reeves for the two decisions on which he U-turned, namely the cut in winter fuel payments for pensioners and the attempt to restrain the growth in disability benefits. Fuelling accusations that Starmer is quick to blame others, it was even suggested that he had been “blindsided” by Reeves on those decisions – for which he shared responsibility at the time.

Hence the suspicion that Starmer wants to strengthen No 10’s economic and fiscal firepower.

The chancellor has certainly been weakened. Jones is not a popular minister – as chief secretary to the Treasury, his main job was to say “no” to ministers in spending departments – but he is a forceful one and a good communicator.

York-Smith was also an important part of Reeves’s empire. He is well thought of (although not by Sue Gray, Starmer’s former chief of staff, who wanted her own person in the principal private secretary role), having had experience of many Budgets, both as the Treasury private secretary in No 10 in Cameron’s time, and recently as the main Treasury civil servant in charge of tax policy.

On the other hand, there are good reasons for Starmer to want a powerful progress-chaser in No 10. Equally, there is a tradition of prime ministers having Treasury people as their principal private secretary. It is also normal for a prime minister to have an economic adviser – what was unusual was that Starmer hadn’t had one until now.

The pro-Reeves interpretation of the reshuffle is that it is a “reverse takeover” of No 10 by the Treasury. Patrick Maguire, the author of Get In, the book about Labour’s path to power, says: “That would be overstating it, but in private, Reeves has long been frank in her assessment of No 10’s policy operation and its absence of any serious economic brain.”

Plainly, the Budget will be the joint property of the prime minister and the chancellor, as always. Starmer can hardly remain hands-off, pretending that the intensely unpopular decisions have come as a surprise to him – especially as there are no easy alternatives to higher taxes and a further squeeze on spending.

The big decision is probably whether or not to break the manifesto promise not to raise income tax, national insurance or VAT – but neither Starmer nor Reeves will want to do that, unless they are forced to do so by the gilts market.

It seems sensible that Starmer, who is no economics expert, should strengthen his side of the discussions with Reeves. Until now, almost the only financially literate person around the prime minister has been Varun Chandra, his business adviser, who is generally praised for his low-profile, high-quality input.

But as they absorb the political pain of unpopular measures, Starmer and Reeves are, in Osborne’s words, “in this together”.