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Shadow chancellor Rachel Reeves has drawn unlikely inspiration from the tight bond between former Tory chancellor George Osborne and his boss David Cameron, as she seeks to maintain a “close working relationship” with Sir Keir Starmer if they become neighbours in Downing Street on July 5.
Reeves views the Cameron-Osborne partnership as a rare example of prime minister and chancellor working in harmony — a feat their Labour counterparts Tony Blair and Gordon Brown had famously failed to emulate.
Despite disagreeing with their politics, Labour officials recognise that Cameron and Osborne worked well together in opposition for five years before taking their partnership into government in 2010. Both left office after the Brexit debacle in 2016.
“It was effective,” said one Labour official, saying the Cameron-Osborne partnership had been discussed internally. “You need to have a good working relationship at the top and no sense of rivalry.”
Reeves told the Financial Times that her relationship with Starmer was similar: “It’s a very close working relationship and people can see that from the way we take decisions, our approach to politics and the way we want to lead.
“It’s a partnership that has served us well in opposition and a partnership we want to take into government.”
But Osborne said it was hard to forge a close partnership between the residents of 10 and 11 Downing Street, noting that others had tried and failed including Prime Minister Theresa May and her chancellor Philip Hammond, and Boris Johnson and his chancellor Sajid Javid.
“None came close and most ended in tears,” he told the FT. “The difference was that David and I had each other’s backs in all situations, and each other’s complete trust — and were prepared to sacrifice something for that.
“For David, it meant accepting a more powerful chancellor; for me it meant never questioning he was the leader, and ultimately leaving office on the same day he did.
“We’ll see if Keir and Rachel are prepared to forge that kind of bond. They’ve clearly formed a strong partnership and led Labour to the brink of victory.”
Lord Nick Macpherson, permanent secretary at the Treasury during Osborne’s chancellorship, said the partnership with Cameron was crucially not just based on the fact they were friends but was also rooted in policy.
“Just as important as the personal relationship was the fact that Cameron was fully behind Treasury orthodoxy, perhaps more than Osborne,” he said. The 2010-16 period was marked by a big squeeze on public spending dubbed “austerity”.
Labour officials say that Starmer and Reeves realised that having a close relationship at the top of the party was a vital part of rebuilding public trust in the opposition party.
Recent Labour experience had seen high profile tensions between Blair and Brown from 1997-2007, followed by discord — after he became prime minister — between Brown and his chancellor Alistair Darling. Ed Miliband, Labour leader from 2010-2015, had poor relations with Ed Balls, his shadow chancellor.
But Macpherson and Balls have recently taught a course at King’s College London in which both have argued that “creative tension” between chancellor and prime minister is vital to good government.
In particular they have questioned whether it would have been better for Osborne, who opposed holding an EU referendum, to threaten to resign on the issue rather than deferring to the prime minister ahead of the 2016 vote.
“A really close relationship works well but there’s a reason why you sometimes want some grit in the oyster,” agreed one former Treasury official. “The chancellor needs to be able to tell the prime minister if he is trying to do something stupid or unaffordable.”
On the question of the Blair-Brown partnership, Reeves told the Times on Saturday: “Tony and Gordon are two political heroes of mine, but the relationship wasn’t a straightforward one. Obviously David Cameron and George Osborne worked very closely together.”
Reeves, a former Bank of England economist, is trusted by Starmer, a former lawyer, to focus on economic policy while he tends to concentrate on wider policy areas and big political messages.
However, with money tight and with pressure likely on any future Labour government to increase public spending, any tensions between Starmer and Reeves are likely to be greater in office than they are in opposition.
Osborne said: “One thing’s for sure — as recent Tory premiers learnt — prime ministers who fight against the Treasury rather than using it as an instrument to their ends are bound to fail.”
