Shadow chancellor accuses Tories of ‘squandering’ UK’s economic potential
Shadow chancellor Rachel Reeves has accused the Conservatives of “squandering” the UK’s economic potential as she called for an end to the Government’s “sticking plaster” approach.
Ahead of Jeremy Hunt’s spring Budget, the Labour frontbencher warned the “huge cost-of-living crisis” was “still the number one concern” as she spoke of the need to prioritise economic growth.
Speaking to the PA news agency, she said: “We’ve been very clear that we’ve got to have an end to this sticking plaster politics of just solving the immediate problem, but never fixing the fundamentals, and the truth is we have got some massive immediate problems at the moment because of a failure of the Conservatives over the last 13 years to fix the foundations.
“We’ve got a huge cost-of-living crisis now, still the number one concern of families and pensioners, and if the Government sticks with its current plans, the average gas and electricity bill will go up by £500 in April and it doesn’t have to be that way.
“We’ve committed to extending the windfall tax and closing the loopholes that exist within it… and use that money to reduce people’s gas and electricity bills.”
Ms Reeves said Labour was “absolutely determined” not to “make any unfunded spending commitments”, citing Liz Truss’s short-lived premiership and the “devastating consequences for family finances”.
She said: “An incoming Labour government is going to be facing a triple whammy of economic growth on the floor, public debt close to 100% of GDP and public services that are on their knees and it does mean that an incoming Labour government is not going to be able to do everything that we want as quickly as we want because of the inheritance we will face.”
She added: “I know that our country has so much potential, our industrial heritage, skills, great universities, the efforts of millions of ordinary working people and thousands of businesses, that we could be doing so much better if we weren’t squandering all of that potential.
“So economic growth to be achieved through our green prosperity plan, the reforms to business rates, the reforms to the Brexit deal… with reforms to the British business bank, that would be the heart of a Labour budget.”
On public sector strikes, the MP for Leeds West said the Government “need to take its responsibilities seriously for resolving industrial disputes”, adding Labour “would be in negotiations”.
She said: “We recognise the challenges that public sector workers face with the rising cost of living but also the problems that our public services face with a recruitment and a retention crisis.”
Labour would fund “one of the biggest expansions of the NHS workforce in its history”, she said, by scrapping the non-dom tax status “which costs £3.2 billion a year”.
Ms Reeves pointed to the UK as the “only G7 economy that’s still smaller than it was before the pandemic” as she referred to the economic impact of the NHS backlog.
She said: “I believe that you need a strong economy to have strong public services, but you also need strong public services for a strong economy.
“When you’ve seven million people waiting for hospital procedures, that is clearly going to be taking people out of the labour market, similarly the mental health epidemic.”
She said that Labour has “fully funded and costed plans for breakfast clubs for all primary school age children which I know will make a big difference to lots of working parents”.
She added: “We recognise the challenge of both social care and childcare as being a barrier for some people in the labour market.”
Under Sir Keir Starmer, she said Labour is a “party of integrity and a party that is determined to govern in the national interest for the whole country”.
Ms Reeves described getting Labour’s “first poll lead on the economy since the early 2000s” as a “really big moment for the Labour Party”, adding: “We’ve sustained that under three Prime Ministers now.”
On devolution, she said: “You’re not going to be able to grow the economy in all parts of the country with good jobs and productivity if all powers and all decisions are made in Whitehall and Westminster.”
A Government spokesperson said: “This government is focused on delivering on the people’s priorities, to build a better, more secure, more prosperous future that this country deserves.
“Our plan to halve inflation this year will allow everyone’s incomes to go further, easing the cost of living and giving people financial security.
“And while we work towards achieving that, we are providing significant support, worth on average £3,500 per household, over this year and next.”