Reeves says economy will put “constraints” on Labour government – LabourList

Sunday with Laura Kuenssberg

Shadow Chancellor Rachel Reeves said there is “clearly a gap” in the government finances and argued that the economic situation an incoming Labour government would inherit would “put constraints on us”.

  • On whether there will be a “big hole” in the government finances: “It is disappointing that we still don’t know the state of the pubic finances. The last Chancellor gagged the Office for Budget Responsibility, so we haven’t been able to see the details of what our public finances or the state of the economy are.”
  • Pressed on whether she agrees there is a “black hole” in the government finances: “There is clearly a gap. We don’t know the scale of it yet, and that is disappointing. It’s why I’ve already started setting out some of the tax changes we would make and we would prioritise.”
  • On whether the country would be facing the same economic situation under Labour: “Of course there are global factors here. The Covid pandemic, the war in Ukraine. But we have been uniquely exposed here in Britain. We’ve been languishing in the global league tables for growth for the last decade or so, which means that when these crises come along, we’re not in a position to be able to deal with them.”
  • On whether she would have to reduce public spending and put taxes up if she were Chancellor: “I’ve already set out some of those tax changes that an incoming Labour government would make. I do recognise that an incoming Labour government will not be able to do everything that we want as quickly as possible. And that is frustrating, because the way that the government has managed our economy and our public finances this last decade means that we’ve both got public services on their knees and public finances in a mess. And an incoming Labour government will inherit that… It will put constraints on us, but it’s important that we get both the stability and security that we need in our economy.”
  • On whether the government’s approach is the only approach: “I recognise that there are restraints on what governments can do. A lot of these problems are because of mistakes that the government have made, but I recognise it imposes constraints on an incoming Labour government. But it’s why it’s so important that we have a serious plan for growing our economy and improving living standards… That will give us the money to invest in public services. But just because you have to make difficult decisions doesn’t mean you have to make the same decisions, and the decisions and the choices that Labour will be making will make our tax system fairer and would grow the economy.”
  • On whether Labour would support lowering the threshold for those paying the highest rate of tax: “It is reasonable to ask those on the highest incomes to pay a bit more in tax. But my key priority would be to crack down on some of the loopholes that we’ve got in our tax system.”
  • Pressed on whom Labour defines as having the “broadest shoulders”: “Labour have got no proposals to increase rates of income tax or National Insurance. In fact, it’s the Tories who have been increasing taxes on working people. We think that if you get your tax from stocks and shares and dividends or through buy-to-let properties, there is a case for looking at how that income is taxed… There are so many loopholes in the system that means the system is not fair.”
  • On whether closing these loopholes would raise enough revenue: “There’s an awful lot you can get at. The windfall tax. The global minimum rate of corporation tax. The non-dom changes. Those are just some of the proposals that Labour have put forward… But the point is, and I guess the difference between Labour and the Conservatives, is that the Tories keep coming back to working people and asking them to pay more, and they do little to close these loopholes that mean some of the wealthiest people and businesses in society are still not paying their fair share.”
  • Asked whether she is guaranteeing not to put up income tax: “I’m not going to write my manifesto for the Labour Party on this programme, Laura. But I’ve got no plans to increase income tax.”
  • On paying compensation to countries most impacted by climate change: “The biggest contribution that the UK can make is to get in and plan our own things we can do here in Britain to get to net zero as quickly as possible.”

Sophy Ridge on Sunday

Shadow Chancellor Rachel Reeves said she is determined to hold Jeremy Hunt to account in his autumn statement next week “on having a fair tax system” and argued that implementing “austerity 2.0” is not “the right approach”.

  • On Jeremy Hunt and the autumn statement: “I am determined to hold him to account on having a fair tax system and what I would like to see… is closing some of the tax loopholes, which mean today that some of the wealthiest in society and some of the biggest businesses are not paying their fair share of taxes.”
  • On reports that the government may extend the windfall tax: “I hope the government does extend it but I hope they do what Labour are calling for, which is ensuring that the tax paid by energy companies here is similar to what it is in Norway and that we get rid of those loopholes that mean for more investment in fossil fuels, those energy companies can offset the windfall tax – that is not right.”
  • On the energy price guarantee: “When Keir Starmer and I set out our plans for the autumn and winter months… at that time the Conservatives were all saying that they didn’t believe in handouts. They’re constantly playing catch up with what Labour are putting forward.”
  • On how long it should last: “We’ll see where we are, and where energy prices are, going into the New Year. But Labour have always been very clear that the windfall tax on energy companies should be used to try and keep bills as low as possible.”
  • Pushed on how long the price guarantee should last: “I’ve made this commitment that we would extend the windfall tax on those big oil and gas companies and we’ve always said that if you do that there’s more money to help people with their gas and electricity bills and the government have always slow pedalled on the support that is needed.”
  • Asked whether Labour will oppose any cuts to public services: “Public services are already on their knees… I don’t believe that austerity 2.0 after the austerity that we’ve gone through after the last 12 years is the right approach – which is why I’m arguing for two things: bot fairer choices on taxes but also crucially a plan for growth.”
  • Asked whether the RCN demands for a 17% pay rise for nurses is affordable: “It is up to the pay review bodies to work with the unions but it is a badge of shame that for the first time in their history, nurses are look to go on strike.”

UNISON general secretary Christina McAnea told viewers that strike action, for which her trade union is currently balloting members, is not “inevitable” and urged “Jeremy Hunt and other government ministers to sit down with the trade unions and actually talk to us about how we can solve this”.

  • Asked whether Jeremy Hunt is right that the NHS can find efficiencies: “I am sure any organisation can find an element of efficiency savings but I think it’s one of these words that’s a bit of a red flag to public sector workers because it so often means cuts.”
  • She added: “The NHS is basically on its knees at the moment… and I can tell you that [NHS staff] don’t think there is any room for efficiency savings. What they want to see is more investment in the NHS, they want to see a pay rate that actually encourages people to join the NHS and crucially to stay in the NHS.”
  • On the government running down the NHS: “Excuse me for sounding like a conspiracy theorist but I’ve heard so many people say it now, is this partly a deliberate attempt to run down the NHS in order to turn around and say we’ll have to bring in some private organisation to run it.”
  • Put to her that some ministers might find that “offensive”: “A bit of me does think what is going on here? How can any politician allow this to happen to something that is so valued to the British public?”
  • Asked whether the RCN pay demand of 17% is “right”: “Well that’s what the Royal College is asking for… We’re balloting our members, over 300,000 in the NHS. Our ballot closes on the 25th November and we’re asking them to vote yes.”
  • On pay negotiations: “Ministers are telling us there’s no more money, there’s nobody sitting down to discuss this with us and what I keep saying is a strike’s not inevitable in the NHS. A strike’s not inevitable anywhere, a strike is a symptom of a problem. It is not in itself the cause.”
  • She added: “I would urge Jeremy Hunt and other government ministers to sit down with the trade unions and actually talk to us about how we can solve this.”
  • On UNISON’s pay demand: “We’re looking for an inflation-proof pay award.”

Jeremy Hunt discussed the autumn statement, due to be delivered next Thursday. He confirmed that there would be “some tax rises and spending cuts”, blaming them on pandemic spending, and said he wanted to make sure that any recession would be as “short and shallow as possible”.

Asked whether the Conservatives have been ‘responsible’ with the public finances, given that national debt had been rising in the years before the pandemic, the Chancellor compared the economy to a household budget – a metaphor widely criticised by economists – and insisted the government has a “plan to bring it down”.

Hunt – who served as the Health Secretary between 2012 and 2018 – said “there are massive pressures in the NHS” and admitted that doctors and nurses are “under unbearable pressure”. He also said “there is a lot of money going to the NHS”, claiming that it is increasing, and said “we need to do everything we can to find efficiencies”.

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