Rachel Reeves: Labour’s fiscal rules ‘non-negotiable’
Rachel Reeves has vowed Labour’s fiscal rules are “non-negotiable” as she pledged that her party would “never play fast and loose with the public finances”.
Discussing Labour’s plans to invest £28bn a year into green jobs and industry, which has since been watered down, the shadow chancellor said she was “confident” Labour could meet this pledge, while ensuring it was subject to the party’s limits on spending.
Under leader Sir Keir Starmer, Labour has committed to “paying for day to day spending through tax receipts and getting debt down as a share of our economy”, Reeves said.
Speaking on the BBC’s Sunday with Laura Kuenssberg programme, she told viewers: “I can’t overstate the damage the Conservatives have done to the economy. But I’m not going to apologise for making sure our sums add up.
“All of our policies, including investing in the industries of the future and boosting our energy security are subject to our fiscal rules.”
Labour ‘confident we can get there’
On the £28bn pledge, she said: “We’re confident that we can get there – we’re committed to it but it’s subject to our fiscal rules.
“Debt has tripled under the Conservatives, it’s now the same size as our whole economy. We’ve got to get a grip on that. All of our plans will be built on a rock of economic and fiscal responsibility.
“Labour will not play fast and loose with the public finances. The people who pay the price for that are the people who own their own homes, who wish to own their own homes, people running small businesses, who have been terribly affected by the turbulence in the economy… We will never put family finances at risk in the way the Conservatives have.”
But treasury minister Victoria Atkins criticised Labour’s pledge, insisting the only route out of the UK’s current economic woes was by “being fiscally responsible, certainly not by borrowing £28bn like Labour has suggested”.
Low tax ‘fundamental belief’
Asked on the show about the potential for tax cuts being announced ahead of the next election, Atkins stressed: “We are Conservatives and we absolutely, fundamentally believe in low tax. I want people to keep more of their hard-earned earnings in their pockets and purses.
“The prime minister and chancellor have said as soon as we can cut taxes we will but we do have to be fiscally responsible, which is why we’ve had to make some very difficult decisions.
“Our priority has to be tackling inflation; that is the quickest way to help people make their pay packets go further.”
She added: “We do not have the headroom at the moment to look at tax cuts but as soon as we can, as soon as we’ve taken the measures that we are taking to reduce inflation, we will be able to start having those conversations.”
Atkins also refused to say whether she thought the government should ditch the principle of following pay review bodies’ recommendations, in case of furthering an inflationary spiral.