Rachel Reeves’s duty is to the people, not the markets | Letters

Your editorial (14 January) rightly critiques Rachel Reeves’s adherence to Treasury orthodoxy. But the persistence of this framework goes deeper than institutional inertia. It reflects a failure to recognise a choice at all – and an inability to imagine and craft better alternatives.

Treasury orthodoxy is rooted in the Thatcher-Reagan era. It is not just outdated, but has become invisible to those who wield it. Traditional economic training teaches policymakers to see fiscal discipline and market reassurance not just as good options but as the only ones. This narrow view blinds them to evidence that transformative public investment, targeted redistribution and state-led solutions can be essential to tackle inequality, stagnation and the environmental crisis.

The Treasury’s intellectual framework is too narrow and entrenched to encourage its staff to question their own assumptions. Without sufficient exposure to alternative economic models – from modern monetary theory to green economics – policymakers lack the intellectual tools to think beyond the constraints of orthodoxy.

Labour is clearly serious about governing in the whole public interest. But to succeed, it must champion new ways of thinking. This is not just about adopting bold policies; it is about equipping our institutions – and those who staff them – to recognise that boldness is necessary, feasible and credible.
Anthony Lawton
Church Langton, Leicestershire

There is nothing inherently good or bad in government deficits or surpluses. They reflect the state of the rest of the economy. If there is a reduction of spending in the private sector then, unless the government picks up the slack, economic activity will decline.

We need to get over the household view of the public finances. If we accept that a government’s duty is to the wellbeing of its people, then the way to judge its performance is relative to that. The key restraint on a government’s ability to carry out the electorate’s wishes is not money (which it creates when it spends), but the amount and quality of our nation’s resources (labour, raw materials, existing infrastructure) and the uses to which they are put.

Do we want our talented students to become doctors or bond traders? Do we want materials to be used to build modest, energy-efficient homes, or five-bed, five-bath properties? Our government should be using the power it has to encourage the outcomes that social attitude surveys show we value, not to obey some arbitrary fiscal rule at the behest of unelected financial markets whose aim is to use money to make money rather than to create things of value to society.
Ros Wain
Clifton upon Teme, Worcestershire

In July 2024, people voted for change. They did not vote for Tory lite, nor Osborne austerity version 2, nor balancing the budget on the backs of disabled people (No 10 backs Rachel Reeves to remain in post for rest of parliament, 13 January).

Rachel Reeves has made some unfortunate choices, such as the winter fuel allowance cut and having business pick up most of the budget black hole. But that now leaves her the opportunity to increase taxes on the rich, such as by restricting tax relief on pension contributions to the basic rate.

If she wishes to cut the welfare bill, how about tackling the housing benefit paid to landlords? Further cuts to general public spending will have Labour out of office by the end of 2029.
Phil Tate
Chester