Even Rachel Reeves knows Labour have hurt Britain

Rachel Reeves addresses Labour Conference
Rachel Reeves addresses Labour Conference - Christopher Furlong/Getty

It’s been a bad week for Rachel Reeves – and the British public. We are bracing ourselves to pay more in tax; she is bracing herself to pay for her own wardrobe.

And today, in her speech in Liverpool, the Chancellor conceded that in her attempt to discredit her strong economic inheritance, she has hurt the British economy.

Her doom-and-gloom rhetoric has knocked consumer and investor confidence. Already, wealth creators are leaving this country at a faster rate than any other nation apart from China. This is the cost of her political choice to attempt to roll the pitch for Autumn tax rises.

She’s panicked. So, in a screeching U-turn, we heard Reeves talk up her “optimism” for the years ahead, built – of course – on the economic legacy the Conservative party passed them.

Standing in front of a sign emboldened with “change begins” she reheated the same tired, failed ideology that Labour always offers: more government, more intervention, more of your money spent on their favoured causes.

She spoke of “stability” but fuelled uncertainty. The public are being forced to keep guessing, wondering whether the Chancellor will come for their pension, investments, savings or house.

And for all her talk of creating growth, Reeves is leading us down the path of stagnation. Even the mooted deregulation is a damp squib; for all the warm words, there was no practical plan forthcoming. Labour’s planning policy changes mean fewer homes in cities like London where the productivity gains are greatest, while their drive to decarbonise the grid by shutting down gas capacity will send electricity costs soaring and hurt British industry.

The Chancellor tried to paint her choices as necessary repair work on the public finances, but that’s plainly nonsense. They’ve found money to give above-inflation pay rises to the public sector and Ed Miliband’s £8 billion pounds for his fantasy energy company.

With her immoral decision to remove the winter fuel payment for 10 million pensions blowing up in her face, the Chancellor is desperately trying to pin the blame on the economic and fiscal inheritance she received. It bears repeating: there is no “black hole” in the public finances, only the decisions taken by a government which wishes to avoid accountability for them.

Let’s run through that inheritance, briefly: the deficit last year was down to 4.4 per cent of GDP – less than half the 10.3 per cent the Coalition inherited in 2010 – and, thanks to the hard work put in by the last government, already set to fall substantially.

The employment rate at 74.8 per cent, higher than in any year under the last Labour government. GDP expanding, with the UK posting better figures than Germany, France, and the eurozone. Inflation has been brought down to a fraction over the 2 per cent target.

It’s certainly true, as I’ve already written, that we could have, and should have, done more to secure long term growth, as well as putting out the fires on the deck. But broadly, the foundations are in place for the Government to build upon.

And Labour is going to undermine them. Perhaps the most important part of the Chancellor’s speech was the refusal to countenance “austerity” coupled with the careful non-denials around raising taxes.

It all comes down to the fundamental difference between the Conservative and Labour parties. Conservatives believe that you know best how to spend your money, that our society functions better when the government steps back to let you build and invest, and that it is better to grow the pie rather than squabble over its division.

Labour does not. Since 1970, no Labour chancellor has left office having cut the tax burden. Reeves’ speech showed that she has learned nothing from the failures of her predecessors.

It is a potent reminder of the costs of losing office – and why my party must change, so the Conservatives can offer the public what they deserve at the next election.