Tag: Rachel Reeves

The speech made by Rachel Reeves, the Shadow Chancellor of the Exchequer, in the House of Commons on 19 October 2022.

I beg to move,

That this House regrets the long-term damage to the economy as a direct result of the mini budget, where mortgage rates for households have risen and the stability of pension funds has come under threat; notes that despite substantial U-turns in policy since the mini budget, the Government’s funding position has deteriorated, the cost of borrowing is expected to be higher for many years and the UK’s fiscal credibility has been undermined, all while many energy producers continue to make record windfall profits; therefore calls on the Government to take all necessary steps to stabilise the economy and make it work for ordinary working people and business through a plan for growth that puts them at its heart; and further calls on the Government to publish the Office for Budget Responsibility forecasts immediately alongside Government estimates of windfall profits for the next two years from energy producers in the UK.

We are here because of a Tory crisis made in Downing Street but paid for by ordinary working people. The Conservative mini-Budget of 23 September will go down in history as the day that the British Government chose to sabotage their own economy. We saw the Conservatives hurl unfunded tax cuts towards the wealthiest, with excessive borrowing and yet more Government debt. The Government set our economy ablaze and, as a direct result, in the past four weeks we have experienced chaos in financial markets, repeated emergency interventions from the Bank of England, warnings from the ratings agencies and rebukes from the International Monetary Fund. Those costs are passed directly on to working people.

Justin Tomlinson (North Swindon) (Con)

I thank the hon. Member for being generous in giving way so early. Does she join me in welcoming last week’s employment statistics, with the highest rate since 1974? In my constituency alone, 920 extra people were in work compared with 12 months ago.

Rachel Reeves

The truth is that a million people are missing from the labour market and half of those have long-term health conditions. We need to do much more to get those people back to work. One reason why unemployment is low is that so many people are not even looking for work because they are waiting for NHS operations, with waiting times at an all-time high.

Today, we learn that inflation has gone above 10% again; food inflation is at more than 14%; and in the last year alone, electricity prices are up 45% and gas prices have doubled. Despite all the extraordinary and unprecedented U-turns in recent days, the damage has been done. This Conservative Government have wrecked people’s finances and snuffed out the dream of home ownership for millions. Some 1.8 million people across the UK will pay higher mortgage bills by the end of next year—on average, they will pay £580 extra every single month—because of the reckless actions of the Government. In my Yorkshire constituency, the cost will be £360 extra a month. In the constituency of the Financial Secretary to the Treasury, the hon. Member for Arundel and South Downs (Andrew Griffith)—who is about to respond to me—it will cost people £640 extra every single month in higher mortgage payments. Families cannot afford to pay those higher mortgage costs, and they certainly cannot pay them with apologies from the Prime Minister. The public will not accept that the arsonists who inflicted this damage can put out the fire. The Tories can never be trusted with our economy again.

Mr Toby Perkins (Chesterfield) (Lab)

I congratulate my hon. Friend on the motion that she has tabled. It seems utterly unarguable that the crisis being wrought upon our constituents is to be laid squarely at the feet of the Government. It would appear that the Government agree, because according to briefings on Twitter, they do not intend to vote against the motion. Does my hon. Friend agree that the fact that the Chancellor has not turned up to defend the record and that Conservative Members do not even seem to disagree with the motion means that we can all agree that this is the Government’s fault?

Rachel Reeves

I agree that it is a shame that October’s Chancellor is not in his place today. This crisis has been co-written by every single member of the Cabinet and every single member of the Government. The Minister for the Armed Forces and Veterans was crystal clear yesterday in pointing out that all Cabinet Ministers had approved and are responsible for Government decisions, including the disastrous mini-Budget. There is no credibility or stability with this Government, just a shambles. All the time, businesses are looking at the state of the Government and deciding where and whether to invest. The Tories’ recklessness and enduring incompetence will cost jobs and investment here in Britain. The Conservatives should not be put in charge of a tombola, let alone the British economy.

Jim Shannon (Strangford) (DUP)

I commend the hon. Lady for what she is saying. Let me back up her comments on economic growth. We need small and medium-sized enterprises to be able to survive and to get through this period. In my constituency, a business—a Japanese restaurant—opened some two months ago. It is doing really well and it employs staff, but its bills are going up from £900 to £3,000. It is clear that unless something happens soon for businesses that are productive and create jobs, they will no longer be there. Does the hon. Lady agree that we need to have a process that helps businesses?

Rachel Reeves

I thank the hon. Gentleman for that intervention. Small businesses, such as the restaurant that he mentions in his constituency, are the backbone of all our constituencies and our economy more widely. An energy bill increase from £900 to £3,000 is not affordable for small businesses. The Government need to do more to help.

David Rutley (Macclesfield) (Con)

I know that the hon. Member takes economic issues very seriously. Protecting pensioners will obviously be a key priority. Does she join me in welcoming the Prime Minister’s confirmation that the triple lock will be protected, and can she set out Labour’s policy on that vital area?

Rachel Reeves

On Monday, the Chancellor said that he could not rule out breaking the triple lock, and on Wednesday, the Prime Minister said something else. We do not know which one speaks for the Government, but Labour is clear that we support the triple lock. It was in our manifesto and, unlike the Conservative party, in government we would stick by what we promised.

Strong and independent economic institutions are essential for making Britain a great place to invest. That is why undermining the Bank of England, sacking the respected permanent secretary at the Treasury and gagging the Office for Budget Responsibility have all added to borrowing costs for Britain—for Government and for families.

On Monday, we saw yet again the ridiculous spectacle of a Conservative Chancellor coming to the House of Commons to announce huge changes in Government economic policy without any sort of independent forecast. Failing to publish a forecast was a significant contributor to the lack of market confidence when the Government unleashed their mini-Budget three and a half weeks ago, yet no lessons have been learned.

The Government cannot build confidence in Britain by flying blind. That is why we are asking all MPs to vote today to publish immediately the current assessments and forecasts from the Office for Budget Responsibility. For the sake of our economic stability, they must not remain hidden for a further two weeks. If the Chancellor refuses, the country will rightly ask, “What have they got to hide?”

Sir Stephen Timms (East Ham) (Lab)

My hon. Friend touched on the point that one of the new Prime Minister’s very first decisions was to sack the permanent secretary to the Treasury. Can my hon. Friend shed any light on why that decision was made? Was it, as appears very likely, because he was set to warn the new Chancellor about the consequences of the policies that he wanted to announce?

Rachel Reeves

As a former Treasury Minister, my right hon. Friend knows how things are supposed to be done. We cannot ask September’s Chancellor why he sacked the respected permanent secretary, because he is no longer in his place, but a Labour Government would respect the Bank of England, respect the independent civil service and remove the gag on the Office for Budget Responsibility.

Today’s inflation numbers show the impact that higher gas and electricity bills are having on family finances. The Government’s mistake when they announced their package a month ago was putting its entire cost on Government borrowing. Under Labour’s plans, energy producers—including the oil and gas industries, which have said themselves that they have more money than they know what to do with—would have been asked to pay their fair share. Our plan did what a responsible Government should: it put forward a fully costed and fully funded package to freeze bills this autumn and winter.

The Conservatives have left tens of billions of pounds on the table and have pushed all the costs on to current and future taxpayers for years to come. Now, because of their irresponsible and reckless approach, they have gone back on their word. According to the Resolution Foundation, that could mean that a typical bill will rise to at least £4,000 from next April.

James Cartlidge (South Suffolk) (Con)

The hon. Lady is being very generous in giving way. Can she confirm that whatever her policy on windfall tax is, the overwhelming majority of her energy support package would have been paid for by borrowing?

Rachel Reeves

The point is that the Government are leaving billions of pounds of unneeded and unnecessary borrowing on the table. Why leave that money on the table when even the energy giants are saying that they have more money than they know what to do with? All that money has been put on borrowing and debt to be paid back by current taxpayers. Tens of billions of pounds have been left on the table by this Tory Government.

It has always been a question of who pays for support with bills. The Conservatives always put it on the never-never, but in the end it is working people who pay the price. In August, Bloomberg reported that the Government’s estimates of energy company windfall profits in the UK over the next two years could be £170 billion. The last Chancellor disputed that and so did the one before, but neither of them confirmed the actual figure. Why not?

Labour’s fiscal rules would protect the economy and protect families. We should not borrow a penny more than is absolutely necessary. That is why our motion

“calls on the Government to publish the Office for Budget Responsibility forecasts immediately alongside Government estimates of windfall profits for the next two years from energy producers in the UK.”

Doing so is in the public interest. Refusal to publish will only confirm that the Government are again putting the profits of energy giants ahead of the sky-high bills for families, pensioners and businesses.

Rushanara Ali (Bethnal Green and Bow) (Lab)

Does my hon. Friend agree that the Government have still not learned a single thing? If they had learned anything from their mismanagement, the Prime Minister and the new Chancellor would have committed to using the profits of energy companies. That is what they should be doing: as my hon. Friend says, the companies want to be taxed to pay for the Government’s failures, rather than the Government cutting public services and hiking mortgage interest. Does she also agree that the Government need to get their priorities straight when it comes to getting rid of the cap on bankers’ bonuses?

Rachel Reeves

As a member of the Treasury Committee, my hon. Friend understands the issues well. The chief executive of BP says that his company is like a cash machine at the moment. We should be ensuring that companies pay their fair share. The war in Ukraine and the illegal invasion of Ukraine mean windfall profits that they could never have dreamed of, but they also mean the highest bills ever for families and pensioners, so the energy companies should pay their fair share.

Anna McMorrin (Cardiff North) (Lab)

My hon. Friend is making an excellent speech. Professor Sinha, the author of the Institute of Health Equity’s report on fuel poverty, has said that there is no doubt that children will die this winter. In July alone, 12,000 more people phoned the Samaritans. Those are the dire consequences of these political actions, yet our energy companies are taking the profits.

Rachel Reeves

My hon. Friend leads me on to the important issue of public services, which the Chancellor has been quick to put in his sights. This week, the respected Institute for Government gave its assessment of the state of public services after 12 years of Conservative Governments:

“Public services are in a fragile state…Patients are waiting half a day in A&E, weeks for GP appointments and a year or more for elective treatments. Few crimes result in charges…Pupils have lost months of learning”.

What an absolutely devastating verdict on the Government’s stewardship of our public services.

Even the Home Secretary, when she is not arguing with tofu, admits that police forces are so stretched that they cannot respond to the victims of crime. The Tories are living on another planet if they think that after a decade of imposing austerity they can come back with season 2, wildly swinging the axe over the country’s already struggling public services.

Catherine McKinnell (Newcastle upon Tyne North) (Lab)

My hon. Friend is spot on and Conservative Members should be listening to her speech. We have seen 12 years of cuts to our public services and facilities, but one small glimmer of hope for people in my city was the successful levelling-up bid for a leisure centre in the outer west of Newcastle. However, the project has now been undermined because of the disastrous economic outlook and soaring inflation costs, which are partly a result of the mini-Budget. Does my hon. Friend agree that the Government must not backtrack on their promises? They must support such projects despite the rising inflation costs that are now undermining local government’s ability to deliver them.

Rachel Reeves

Levelling up has truly been replaced by trickle down, and my hon. Friend’s constituents are paying the price.

We need strong public services focused on early intervention and prevention, reducing greater demand with better outcomes for people. We need the Government to stick to their manifesto commitments, including uprating benefits and pensions in line with inflation. It should not be working families, pensioners and the most vulnerable who pay the price for these Tory mistakes.

Mr Richard Holden (North West Durham) (Con)

Will the hon. Lady give way?

Rachel Reeves

I will make a bit more progress.

Labour will get value for every pound of taxpayers’ money. That is why I announced last year that a Labour Government will introduce an office for value for money, tackling the endemic waste that we have seen under the Tories. Under the Conservatives, £11.8 billion of public money was handed to fraudsters and organised criminals because of a refusal to include the most basic security checks for covid support. That is before we get to the £7 billion spent on unusable personal protective equipment, the £13 billion wasted on failed defence procurements and the millions and millions flushed down the drain by this Government’s outsourced Serco test and trace system.

This week, we have read reports that the Treasury is shutting down the taxpayer protection taskforce that it belatedly set up in March to try to retrieve the money that the Government gave to the fraudsters. The taskforce should not be shut down; it should be empowered to get taxpayers’ money back.

As for the £3.5 billion handed out to friends of and donors to the Conservative party, many of whom failed to deliver on those contracts, in business if you award a contract and it does not deliver, you claw the money back. The Government must now strain every sinew to get that money back, because taxpayers demand it, and that comes before the cuts and the austerity that this Government are about to unleash.

The Government say that working people now have to put up with eye-wateringly difficult decisions, but there are so many easy decisions that the Government could make to stop families feeling the pain. Why keep in place an outdated and unjustifiable non-dom tax status loophole which means that some of the wealthiest pay no tax on their incomes while ordinary working people face the highest tax burden in 70 years in this low-growth, high-tax economy? Labour’s principle is clear: if you make Britain your home, you should pay your taxes here. Research carried out at the London School of Economics and Warwick University has shown that the UK’s non-dom system costs us £3.2 billion a year.

Look at the tax break for private equity managers, which was cooked up in the 1980s by a Conservative Government—a tax break of nearly £200,000 each for 2,000 private equity bosses every single year! It is not right that bosses pay a lower rate of tax on their bonuses than workers do on their wages. It is indefensible, so Labour will abolish it. At present, private schools enjoy charitable status which makes them exempt from both business rates and VAT at a cost of £1.7 billion every year, but here is the truth: private schools are not charities. We will end that exemption, and put that money back into our state schools.

That is what a fair tax system looks like, and that is what Britain will get with a Labour Government: fiscal responsibility, and a fair tax system that puts working people first. Labour will stabilise the economy by being responsible with public finances through our strong fiscal rules. It is on that foundation that our green prosperity plan will invest in the jobs and industries of tomorrow as we meet our climate obligations and secure our energy supply here in Britain. There are great opportunities for the industries of the future, and opportunities for Government to partner with industry and invest in, for instance, domestic renewables such as wind, hydrogen and carbon capture, and nuclear as well. Labour will create a national wealth fund so that when we build British industry, the public will have a stake and receive a return on those investments. The next Labour Government will buy, make and sell more here in Britain, with an industrial strategy that is pro-worker and pro-business. We will breathe new life into our high streets by calling time on the outdated model of business rates. That is a real plan for the future, not lurching from crisis to crisis like the Conservatives.

Mr Holden

Will the hon. Lady give way?

Rachel Reeves

No. I have almost run out of time. I have been speaking for 20 minutes, and I have taken a great many interventions.

So much damage has been done to our economy by the Conservatives’ reckless mini-Budget, but the Government can prevent things from becoming even worse. Today they can show that they have listened, and publish the OBR forecasts and assessments that they are sitting on so we can know the true state of our public finances and our economy. They should publish the assessments that they already have of the windfall profits of the energy giants in the next two years, and then set out clear steps to introduce a proper windfall tax. It is a sign of how far off the road of competence and responsibility this Conservative Government are that they have not already done those basic things.

People can no longer afford the cost of Tory failure. We need a stronger and fairer economy from a Government committed to financial responsibility, and a serious plan for growth that puts working people first. The very least the Government can do is publish the numbers, and I urge all Members to support this motion to ensure that they do exactly that.

The speech made by Rachel Reeves, the Shadow Chancellor of the Exchequer, in the House of Commons on 17 October 2022.

As I regularly say now, I welcome the new Chancellor to his place. He is the fourth in four months of chaos and fiasco as this Conservative Government spiral down the political plughole. But the damage has been done: this is a Tory crisis made in Downing Street, but ordinary working people are paying the price. All that is left, after these humiliating U-turns, are higher mortgages for working people and higher bonuses for bankers. The Government’s climbdown on energy support begs the question yet again why they will not extend the windfall tax on energy producers to help to foot the bill.

It is good to finally see the Prime Minister in her place and not, as the Leader of the House had to assure us earlier, under a desk. But what is she left with? She has no authority, no credibility and no plan for growth. It is clear to see that the people who caused the chaos cannot be the people to fix the chaos. They are out of ideas, out of touch and out of time.

The Prime Minister should have spoken to the House today, but we know that she could not do that with a shred of credibility, given that the survival of this Government now depends on smashing to smithereens everything that she stands for. Now she is attempting to reverse everything that she campaigned on—it is not just impossible; it is absurd. The Prime Minister is barely in office and she is certainly not in power. Only five days ago, the Prime Minister said at Prime Minister’s questions that there would be “absolutely” no public spending reductions, but after what we heard from the Chancellor today, every single public service is again at risk from the Conservatives—from our NHS nurses to our schools and our servicemen and women—with the country paying the price for the Conservatives’ incompetence.

The Prime Minister said that she had an energy package for two years. Now that is being withdrawn on the very day it is supposed to be legislated for. She insisted that her Conservative mini-Budget would lead the country to the promised land. Instead it has led to the highest mortgages in 15 years and emergency interventions by the Bank of England to protect pensions. Then on Friday, there was the unedifying spectacle of the then Chancellor being dragged back from the IMF before he could do any more damage to our economy. So she has turned to a new Chancellor, who finished eighth out of eight in the Tory leadership contest, winning just 18 votes from MPs. The Tories have run out of credibility and now they are running out of Chancellors.

The latest office holder has been in the Cabinet for nine of the past 12 years, at the centre of a Government responsible for low growth and weakened public services, with him responsible for helping run the NHS into the ground. He was a big part of austerity season 1, and now he says the cure is austerity season 2. What was the Chancellor’s flagship policy in his own short-lived leadership contest? It was to reduce corporation tax in a totally unfunded manner, and not from 25% to 19%. The right hon. Gentleman called for it to be lowered to 15%, with not a single explanation of how it was to be paid for. The truth is that had he won the contest and implemented these policies, we would be in an even worse place than we are now. There is no mandate and no authority for any of this.

The Conservatives have put a lasting premium on people’s mortgages. Uncosted borrowing has sent interest rates spiralling. Millions of people’s mortgage deals will be coming to an end in the next few months, leaving many families forking out £500 more a month. People will be paying a Tory mortgage premium for years to come, so how does the Chancellor think ordinary people can possibly afford any more of this Conservative Government? We have heard no answers today. The Chancellor has said that growth requires “confidence and stability”. I agree, but where does he think the lack of confidence and stability has come from? It did not come from the sky; it came from the mini-Budget three weeks ago.

What does it say about our country that we are watching borrowing costs hour by hour? That is not the sign of a strong G7 economy; it is the exact opposite. Businesses are now saying that things are so unstable they are pausing investment here in Britain. The former deputy governor of the Bank of England Charles Bean has outlined the extraordinary damage that the Conservatives have done to our standing. In his words,

“we’ve moved from looking not too dissimilar from the US or Germany…to looking more like Italy and Greece.”

What a mess.

Where is the Office for Budget Responsibility forecast? Have this Government learnt nothing? Does the Chancellor really expect the country to take everything from him at face value? Last week, the Business Secretary was busy undermining the Office for Budget Responsibility. Today, we have received another massive fiscal statement with no forecast. What have this Government got to hide? They should publish the numbers so that we know the true state of the public finances after 40 days of this Prime Minister and after 12 years of Conservative Governments.

Today, the Chancellor has scaled back help with energy bills for families and pensioners. It prompts the question yet again: why will the Government not bring in a proper windfall tax on energy producers to help foot the bill for consumers, and when will the current Chancellor publish in full the Government’s estimates of the windfall profits of the energy giants over the next two years?

No one was talking about spending cuts until the Tories crashed the economy with their mini-Budget, so I ask the Chancellor: why should the British people pay the economic price for the Tories’ mistakes, and what spending cuts do the Government plan to make? We believe that the Government must honour their commitments to uprate benefits and pensions in line with inflation. Will the Chancellor make it clear today that is what he intends to do? What a contrast that cuts to benefits are still on the table, but the one thing the Chancellor could not bring himself to reverse today was lifting the cap on bankers’ bonuses. Why is this the last policy standing in this disastrous mini-Budget?

Let me come to credibility. Does the Chancellor accept that once credibility and trust have been destroyed, they cannot simply be regained by a series of zig-zagging, chaotic U-turns? Will he and the Prime Minister apologise for the costs and anxieties laid on families? Can he admit once and for all that the market turmoil we are in was directly caused by the disastrous decisions of his predecessor and of the Prime Minister? Can he guarantee that the Bank of England will not have to intervene again to save the Government, and what guarantee can he give people about their pensions, their mortgages and their household bills?

The Chancellor said today that everything is now on the table, but is that really the case? We know that abolishing the non-dom tax status will raise £3 billion a year, yet there was no mention of that. How can it be right that some of the richest individuals in society are allowed to buy their way out of paying the tax that should be paid here Britain? This would not be an eye-wateringly difficult decision, so why do not the Government just do it?

There is lasting damage which these policy U-turns will not change. They have set fire to everything; now they insist it is all fine. The truth is that an arsonist is still an arsonist even if he runs back into a burning building with a bucket of water. Because they cannot be trusted; the Tories are clinging on for themselves, regardless of the cost to the country.

Trickle-down economics will always fail; what drives forward our economy are the talents and efforts of millions of working people and thousands of ordinary businesses. The Government’s economic credibility has been destroyed. They have harmed our economic institutions, people are paying higher mortgages; the same set of people doing U-turns is not going to fix it. The only way to change this is a real change of Government.

The speech made by Rachel Reeves, the Shadow Chancellor of the Exchequer, in the House of Commons on 12 October 2022.

People are facing insecurity, instability and deep anxiety and they deserve answers. Conservative economic policy has caused mayhem with financial markets, pushed up mortgage costs and put pension funds in peril, and it has wiped £300 billion off the UK’s stock and bond markets—all directly caused by the choices of this Government. The mini-Budget, just 19 days ago, was a bonfire made up of unfunded tax cuts, excessive borrowing and repeated undermining of economic institutions. It was built and then set ablaze by a Conservative party totally out of control—not “disrupters” but pyromaniacs. And that fire has now spread. Yet Government deny all responsibility.

So will the Minister tell the House, what guarantees will the Government give that the currency slide will stop, and that people’s pensions are safe? How do they expect people to pay £500 more a month, on average, on their mortgages? How many more repossessions of family homes will there be if the Government do not change course? How much more are the Government spending on debt interest because of higher borrowing costs?

While Ministers desperately try to blame global conditions, why is it that no other central bank in the world has had to step in three times in less than three weeks to protect financial stability?

The country now faces a very serious situation. Ahead of the ending of the Bank of England’s emergency operations this Friday, what action will the Government take to ensure that their Budget does not have further consequences for financial stability, or for people’s pensions?

This is a Tory crisis made in Downing Street, but it is ordinary working people who are paying the price. It can be resolved only when the Conservatives put aside their pride and reverse this catastrophic mini-Budget, and they must do so now.

Chris Philp

The shadow Chancellor calls for a reversal of the growth plan, yet at the first opportunity—last night—the Labour party voted for it. She asks about mortgage rates, so let me point out to her that mortgage rates around the world have been on an upward trajectory all year. In fact, if we compare base rates in the United Kingdom with those in the United States, we see that in both countries, as she will be aware, the base rate started this year at 0.25%. In the UK the base rate is currently 2.25%, and in the US it is 3.25%, a full percentage point higher.

The shadow Chancellor referenced borrowing costs. I am sure she is aware that two-year Government bond yields are about the same in the US as they are in the UK—US bond yields have been going up over the course of this year as well. She referenced the currency: the dollar has shown strength against a basket of currencies throughout this calendar year. If she looks at the dollar strengthening against the euro, she will see that it strengthened about 15% this calendar year, and strengthened about 15% against sterling—very similar figures.

The shadow Chancellor also asked about the cost of living. We are very mindful of that, which is why we have introduced a £37 billion package to help people, disproportionately targeted at those on lower incomes, so that people on the lowest third of incomes receive £1,200. It is why we introduced the energy price guarantee on our second or third day in office, ensuring that people do not pay, on average, more than £2,500, instead of facing bills of £5,000 or £6,000—and not for six months, as the Labour party offered, but for two years. It is why the national minimum wage was increased by a large amount last April. It is why the national insurance threshold was increased to £12,500 in July, so people on lower incomes now pay virtually no national insurance or income tax. That is the package of measures that this Government have introduced, because we stand on the side of working people and have taken the steps needed to support them.

The speech made by Rachel Reeves, the Shadow Chancellor of the Exchequer, in the House of Commons on 23 September 2022.

Thank you, Mr Speaker.

I would like to welcome the Rt Hon Gentleman to his place and I thank him for his statement.

He is the third Conservative Chancellor this year – and it’s still only September.

The Chancellor has confirmed that the costs of the energy price cap will be funded by borrowing, leaving the eye-watering windfall profits of the energy giants untaxed.

The oil and gas producers will be toasting the Chancellor in the boardrooms as we speak – while working people are left to pick up the bill.

Borrowing higher than it needs to be, just as interest rates rise.

And yet the Chancellor refuses to allow independent economic forecasts to be published which would show the impact of this borrowing on our public finances on growth and inflation.

It is a budget without figures.

A menu without prices.

What, Mr Speaker, has he got to hide?

This statement is an admission of 12 years of economic failure.

And now here we are – one last throw of the dice, one last claim that these ministers will be different.

For all the chopping and changing and chaos and confusion there has been one person here throughout.

The Prime Minister.

She’s been a minister for a decade, out defending every single economic decision.

When the Prime Minister says she wants to break free from the past, what she really means is she wants to break free from her own record.

Because where have the last 12 years left us?

Lower growth, lower investment, lower productivity.

And today, we learn we have the lowest consumer confidence since records began.

The only things that are going up are inflation, interest rates and bankers’ bonuses.

As the Tories become more and more detached from reality millions of people are lying awake at night worrying about how they’ll make ends meet.

Labour won the argument that action on energy bills was necessary.

But the question is: who pays?

The energy producers who have profited so much from the rise in prices should make a contribution.

But when the country asked who should foot the bill for their energy rescue
package the Conservatives responded: “you”, the British people.

Instead of standing up for working people, the Conservatives chose to shield the gigantic windfall profits of the energy giants leaving tens of billions of pounds on the table and pushing all the costs onto borrowing to be paid for by current and future taxpayers.

This Prime Minister and Chancellor have no regard for taxpayers’ interests or the concerns of working people.

It’s not just that this Conservative government is not working for ordinary families – it’s actively working against them.

Mr Speaker, we have had six so-called growth plans from the Conservatives since 2010.

A litany of failure.

I do at least commend the Chancellor on having the ambition of achieving two and a half percent growth a year – the last Labour government’s rate of growth.

But to achieve that sort of growth and for that growth to be sustainable, you need a credible plan.

And the truth is that this government does not have one.

The Prime Minister and Chancellor are like two desperate gamblers in a casino, chasing a losing run.

The argument peddled by the Chancellor today isn’t a great new idea as much as he’d like us to think so.

What this plan adds up to is to keep corporation tax where it is today and to take national insurance, which they voted to increase, back to where it was last March.

Some new plan!

And it’s based on an outdated ideology that says if we simply reward those who are already wealthy, the whole of society will benefit.

They’ve decided to replace levelling up with trickle down.

As President Biden said this week, he is “sick and tired of trickle-down economics.”

And he is right to be.

It is discredited, it is inadequate and it will not unleash the wave of investment that we need.

Mr Speaker, it’s not just this side of the House with concerns.

The Rt Hon Member for Surrey Heath, described the Prime Minister’s economic plans as ‘taking a holiday from reality’.

The Rt Hon Member for Richmond, two Chancellors ago, was perhaps too honest with his party when he told them:

“We tried having a … low corporation tax … as a means of getting businesses to invest.”

But that “It has not worked.”

The new Chancellor and Prime Minister used to agree with that.

They voted for the corporation tax rise, and Labour supported it too.

Members opposite might have changed their minds, but we have not.

Because the evidence shows that low rates of Corporation Tax are not the best way to boost investment and productivity and the Tories’ own record shows that.

Britain has the lowest headline rate of corporation tax in the G7 but we also have the lowest rate of private investment.

That’s why Labour would do what businesses are actually asking for:

Using targeted investment allowances to boost productivity and growth.

And scrapping outdated and unfair Business Rates, that harm our small businesses and high streets replacing them with a system that’s fit for the 21st Century.

What about their other policies?

Let’s take these so-called ‘investment zones’.

Again, these are nothing new.

Every time they were tried, all they have achieved was moving growth around
the country, not creating growth.

The best way out of this high tax, low growth spiral that the Tories have created is to get the economy firing on all cylinders in all parts of the country.

It’s going to take much more than a stamp duty cut to get our economy back on track and home ownership back to the levels last seen under the Labour government.

These stamp duty changes have been tried before.

Last time they did it, a third of the people who benefited were buying a second or third home, or a buy to let property.

Is that really the best use of taxpayers money when borrowing and debt are already so high?

And can the Chancellor confirm today how much of his stamp duty cut will go to those purchasing multiple properties?

Instead of a stamp duty rates going up and down like a yo-yo, we’ve got to get building.

We need to target support at first time buyers and tackle the issue of homes being sold to overseas investors.

The Chancellor has made clear today who his priorities are. Not a plan for growth, a plan to reward the already wealthy.

A return to the trickle down of the past, back to the past, not a brave new future.

This Chancellor and Prime Minister proclaimed in Britannia Unchained that ‘the British are amongst the worst idlers in the world’.

And to prove they mean it, instead of supporting working people this government is cutting their rights at work.

Working people are the backbone of Britain and should be respected not sneered at.

Labour will always stand up for their rights.

The Chancellor has in effect today admitted he has broken his fiscal rules.

This is the 10th time the Tories have broken their own rules, something that I’m sure the Office for Budget Responsibility would have confirmed if they had been allowed to publish their forecasts today.

Mr Speaker, it is unprecedented to have a fiscal statement of this scale with no independent forecasts from the Office for Budget Responsibility.

Never has a government borrowed so much and explained so little.

Economic institutions matter.

Yet this government has undermined the Bank of England, sacked the respected Permanent Secretary at the Treasury and silenced the Office for Budget Responsibility.

That is no way to build confidence.

This is no way to build growth.

Mr Speaker, Labour believes in wealth creation.

We will always support enterprise, creativity and hard work.

We want British businesses to grow, to be successful and contribute to our wider prosperity.

We don’t believe – as the Chancellor and Prime Minister do – that British workers are idlers.

We understand that it is the workers who turn up every day to make the great product at a factory or deliver a great service in the store who generate growth.

It is the teachers giving the young people the skills they need.

It is the doctors and nurses keeping people well.

It is the entrepreneur taking a personal risk to start a new business.

These are the people who generate growth – and they all deserve to share in it too.

Mr Speaker this statement is more than a clash of policies.

It is a clash of ideas – two different ideas of how our country prospers.

If you’re a pensioner worried about the cost of living, a working family seeing your mortgage costs going up or a small business owner whose costs are spiralling, the government’s announcements today do little to reassure you.

Bigger bonuses for the bankers and huge profits for energy giants, shamelessly shielded by Downing Street.

And all the while, ministers pile the crushing weight of all these costs onto the backs of taxpayers.

The Conservatives can’t solve the cost of living crisis.

The Conservatives are the cost of living crisis.

And our country cannot afford them anymore.

The speech made by Rachel Reeves, the Shadow Chancellor of the Exchequer, on 13 July 2022.

Thank you.

I want to pay tribute to the work of the Economy 2030 Inquiry.

Today’s report strikes not just at the truth that our economic problems are deep-rooted but that they are far more than an abstract question of lines on a chart.

That it is questions of growth, productivity and inequality which underlie the sense that Britain isn’t working for far too many people.

As many of you will know, I’m an economist by trade, spending the best part of a decade at the Bank of England.

But I’m also a politician, so let me spend a few moments on the political situation we find ourselves in.

Because the tables have turned.

On the day the Prime Minister finally announced his intention to stand down, I was in Leeds, meeting business leaders.

What I heard from them was what I have heard repeatedly over recent weeks:

That political instability at the top is a major drag on market confidence – and the last week has shown us something else about this government.

Because any lingering sense that the Conservatives are the party of economic responsibility has been shredded to pieces over the past few days.

Instead of setting out serious plans to help people with the cost of living crisis, just as we hear terrifying estimates of how much energy bills will go up again in October, we are presented with the extraordinary spectacle of a Tory tombola of tax cuts – with no explanation of what public services will be cut, or how else they’d be paid for.

Honesty and integrity matter in politics, not just when it comes to parties and rule breaking but also when it comes to economic policymaking.

The level of unfunded tax cuts being bandied about this week would blow a massive hole in the public finances.

Every single Conservative leadership candidate supported the government’s fiscal rules when they were passed into law in January, but now they are prepared to take a flamethrower to them.

I’ve set out the fiscal rules which will bind the next Labour government.

Rules which I will stick to with iron clad discipline.

Because responsible management of our public finances is the only route to providing the strong foundations we need to reboot our economy, revitalise our public services and re-energise our communities.

They will be paired with an absolute commitment to ending the shocking levels of waste and fraud we’ve seen under this government strengthened by the creation of a new Office of Value for Money, .to make sure every pound of taxpayers’ money is treated with the respect it deserves.

Back in September I said that I am more than happy to take on the Tories when it comes to economic competence because I know we can win. If didn’t know then that they wouldn’t even bother putting up a fight.

It is important that we put this moment in wider context.

Because we face a succession of long-term economic challenges – low growth, flatlining productivity, stagnant wages, and now soaring inflation.

Under the last Labour government, the UK economy grew at an average of 2.1 percent a year, allowing us to deliver the biggest boost to investment in public services in our lifetimes.

But since then, growth has averaged just 1.5 percent a year.

We shouldn’t kid ourselves that this is solely a product of global trends.

The UK had the second lowest productivity growth in the G7 in the 2010s and, as today’s report shows, the UK’s productivity gap with France and Germany has almost trebled since 2008 – equivalent to an extra £3,700 in lost output per person.

Stagnation isn’t inevitable.

Our capacity for innovation, enterprise and old-fashioned hard work remains undiminished.

Britain has huge opportunities if only we have a government that can bring the country together in a spirit of national purpose.

But the only alternative to a high-tax, low-growth, high-inflation economy is a serious plan.

Let me tell you what that involves.

It means addressing our deep-rooted supply-side problems which have contributed to low growth and stalling productivity and are a major factor in the spiralling inflation rates we’re seeing.

In America, Treasury Secretary Janet Yellen has called this approach “modern supply side” economics.

It’s based on the knowledge that government plays a crucial role in bringing about economic growth and tackling the structural challenges that have held us back

My vision for a modern supply side economics for the UK involves three key things.

First, we need to make sure people can realise their potential and play an active role in a growing economy.

For all ministers’ talk of a jobs miracle the reality is we have a hidden worklessness crisis with employment lower than before the pandemic at a time of record vacancies, and a million people missing from the workforce relative to pre-pandemic trends.

That is why my colleague Jonathan Ashworth this week outlined plans from better links between employment and health services, to flexible working, and reforming how our job centres operate to help people return to work where they can.

Fundamental to strengthening our supply of labour is supporting parents to work.

That means urgently addressing the cost and availability of high-quality, affordable and flexible childcare.

Second, we need to support British businesses to thrive – working in partnership to get the economy growing again and provide the good jobs we need.

That will rest on a modern industrial strategy on our plan to use all the tools at government’s disposal to buy, make and sell more in Britain, and on our Climate Investment Pledge – which will help create new markets and leverage in private investment, and drive carbon emissions down.

Today’s Resolution Foundation report argues forcefully – and rightly – that we must play to Britain’s strengths.

We are the second largest exporter of services in the world and pioneers in creative industries.

We should be proud of those strengths.

That is why it is beyond belief that the Tories delivered a Brexit deal that hurts our creative and service industries.

So we will address these flaws building on the deal, ensuring at a minimum we agree the mutual recognition of professional qualifications and negotiate an EU-wide cultural touring arrangement.

And third… we need to support great British entrepreneurs.

Which is why, last month, I announced the launch of a new review, led by a panel including Lord Jim O’Neill to map out how we can build the institutional ecosystem that ensure new and growing businesses have what they need to flourish here in the UK.

This approach – a new, ‘modern supply side’ economics – comprises an ambitious plan for growth grounded in the realities of the world in the 2020s, not in Tory Party fantasy which would result in higher borrowing, increased mortgage rates, and cuts to our schools, hospitals and police.

Labour’s alternative is based on partnership between government and business – working for sustainable growth felt in every part of the country with a serious plan and the determination to deliver it, built on the strong foundations provided by our fiscal rules.

Committed to honesty and integrity, because they are important virtues in public life, and because they are essential to a growing economy with stronger public services and higher living standards for all.

Thank you.

The speech made by Rachel Reeves, the Shadow Chancellor of the Exchequer, to the Times CEO Summit in London on 16 June 2022.

Thank you Dominic, and thanks to the Times for hosting us today.

Since being appointed Shadow Chancellor I have had the privilege to visit inspiring British businesses.

From Castleton Mills, once a key part of West Yorkshire’s textiles industry – now reimagined as a creative, collaborative space housing freelancers and start-ups.

To world-recognised names like Rolls Royce in Derby – leading pioneering research to develop carbon-neutral aviation.

And Oxford Nanopore, one of our leading technology and life science firms.

Britain has huge economic strengths. Our leading universities, our language, our geography, our excellence in sectors from financial services to life sciences to cultural industries.

But questions of wealth creation have become too marginal to our politics.

After starting my career as an economist at the Bank of England, I spent several years at HBOS in Halifax.

I know what business can bring. Not just in prosperity and work which pays well – but in pride and identity.

After a decade in which people have seen their incomes stagnate and their public services cut to the bone, I don’t only see the task of building a more just society as a moral responsibility – though it is that – but also as the route to a dynamic economy with wealth creation at its core.

Through which opportunity is widely shared, and through which we can break out of our cycle of low growth, low productivity and underinvestment.

Labour is pro-worker and pro-business in the knowledge that the success of both is crucial to our country’s economic success.

A new partnership between government and business will be the foundation of everything the next Labour government will hope to achieve.

This a challenging moment.

The politics of stagflation and energy security have come to the fore for the first time in half a century.

But this present crisis is just the latest chapter in a longer economic story. Between 1997 and 2010, the UK economy grew at an average of 2.1 percent a year, but since then, growth has averaged just 1.5 percent a year.

And now the OECD forecasts that the UK will have zero growth next year – putting us behind every G20 economy bar Russia.

I don’t accept that economic decline is an inevitability.

But we do face a succession of challenges if we are to return to strong growth and shared prosperity.

Our success will rely on the leadership of both government and business.

I know businesses increasingly recognise their wider role in strengthening our economy and society.

But there is an onus on government to rethink too.

It is no longer enough – if it ever was – for government to simply get out of the way.

In America, the Biden administration is taking a more active role in tackling structural economic weaknesses. US Treasury Secretary Janet Yellen calls this approach ‘modern supply side economics.’

For the next Labour government, such an approach will mean government applying itself more concertedly to driving up the productive potential of our economy. By boosting labour supply through providing workers with the skills, healthcare, and childcare they need to flourish. By using its power of procurement to support businesses here in Britain. And as a strategic partner of business.

Let me talk more about that final point – strategic partnership.

I want to see UK companies thrive, to see great ideas come to fruition and for the UK to be a great place in which to invest.

But I don’t believe all that happens in a vacuum.

The state has to be active in fostering the conditions for our country to prosper, whether that is in sponsoring world leading research, getting the regulatory environment right, or in helping bridge the gap between a fantastic concept and the reality of its commercial production.

The last Labour Government developed an active industrial strategy on these lines – and for all my differences with the the Cameron and May governments, their efforts to continue this work were welcome.

But now these efforts have been abandoned – and the industrial strategy scrapped.

And for no clear reason, other than an ideological objection.

Ideology won’t help great British companies, but good partnership will.

That’s why Labour will bring local, regional and national leaders together with businesses, workers and universities to support the growth of high-tech, competitive industries of the future. And to map out a better way forward for the high-employment, low-productivity sectors on which we all rely – what I call the everyday economy.

But an approach to strategic partnership can’t stop there.

I agree with the director of the CBI, Tony Danker, that what is required to break us out of our cycle of underinvestment and low productivity is ‘catalytic public investment’.

Labour’s climate investment pledge would provide just that, and crowd in private sector investment – to create new markets and bolster existing ones.

And a modern supply side approach cannot and must not ignore the task of making Brexit work for British businesses and consumers.

So we must address the flaws in the Brexit deal hitting our food and drinks manufacturers, creative industries, professional services and more – through repairing and strengthening our supply chains, and building on the UK-EU trade deal to cut red tape for exporters.

We need to adopt an approach that seeks to solve problems in a practical way for UK companies, and aims to build trust – rather than continually retreating to the issue of Brexit as a domestic political wedge.

Any competitive market economy must offer opportunities for new, innovative and agile businesses to flourish.

Innovation is a great British strength. It’s in our DNA.

We have immense resources in the creativity and drive of our entrepreneurs, and the innovative capacity of our universities.

Fast-growing firms already contribute £1 trillion to our economy and employ 3.2 million people.

But something I have heard repeatedly is a real worry about the stubborn obstacles preventing many of them from scaling up, and the small number of start-ups listing in the UK.

Labour’s mission is to build an institutional ecosystem enabling the market access, finance, and skills that new and growing businesses need.

So today I am launching a review, led by a panel of entrepreneurs and experts including the economist and former Treasury Minister Lord Jim O’Neill, and tasked with charting a course to ensure Britain is the best place to start and to grow a business.

The review will be given a remit to ask the difficult questions and present solutions – about the incentives for growing businesses here compared with other countries, about access to capital – especially patient capital, about the skills, structures and incentives presented to our universities to spin out new businesses, and about how we extend opportunities to a more diverse range of entrepreneurs.

I consider it a key task for the next Labour government – a central part of a modern supply side approach – to provide answers to those questions, and to unleash the next generation of innovators and wealth creators.

The method I have outlined today is a modern supply-side approach, with government as a provider economic security, enabler of a highly-skilled workforce, and a strategic partner to business.

The object is a stronger society – underpinned by a thriving market economy in which opportunity is shared widely.

But to realise this, we need a different kind of leadership. Upholding strong institutions, practising transparent decision-making, and showing respect for business.

Keir Starmer’s Labour Party – proudly pro-worker and proudly pro-business – will offer that leadership.

Thank you.