Rachel Reeves insisted that she had to plug what she called a £22 billion hole in public spending and put the blame squarely on the Tories.
The Mail’s Ross Clark looks at whether her claims really stack up.
CONSERVATIVES MADE SPENDING PROMISES BUT DIDN’T HAVE ENOUGH MONEY:
Claim: The Conservatives made promises even though they knew they didn’t have enough money
REALITY: The single biggest ‘unfunded spending commitment’ supposedly identified by Rachel Reeves was £9.4 bn-worth of above-inflation pay rises for teachers and other public sector workers.
Chancellor Rachel Reeves has claimed that there is a £22bn shortfall in the public finances and has said that thirteen years of Conservative stewardship are to blame
The new Government has decided to reward public sector unions which help fund the party, and to blame the Tories for the pain this will cause taxpayers
Yet the previous Conservative government had made no commitment to meet the 5.5 per cent pay rises recommended by the pay review bodies. It is Reeves’s own decision to stump up the money.
The Chancellor’s somewhat flimsy argument is that the previous government didn’t give the pay review bodies guidance as to what could be afforded – and so she has no choice but to meet their recommendations.
But she could simply have told the unions that there’s no money.
The new Government has decided to reward the public sector unions which help fund the party – and to blame the Tories for the pain this will cause taxpayers.
IRRESPONSIBLE SPENDING BY THE CONSERVATIVES:
Claim: Rishi Sunak’s government made irresponsible commitments to spend money on roads, railways and hospitals. Now those spending promises must be cut back
Reality: Reeves says that the Tories have overspent this year by £1.6 bn on the railways, by £250 m on buses and have failed properly to fund the 40 new hospitals they have promised. Projects to re-open old rail lines will be chopped back and road schemes – including the A303 Stonehenge tunnel and the A27 Arundel bypass in West Sussex – will be cancelled.
Yet a few months ago, Reeves was blasting the Tories for not spending enough on infrastructure.
Rachel Reeves has blamed predecessor Jeremy Hunt for Britain’s economic woes. She has claimed that the Conservatives overspent this year by £1.6bn on the railways alone
While Labour has decided to blame the Conservatives and Rishi Sunak, only a few months ago they were blasting the Tories for not spending enough on infrastructure
‘If we want to spur investment, restore economic security and revive growth, then we must get Britain building again,’ she told the Labour Party conference. ‘The single biggest obstacle to building infrastructure, to investment and growth … is the Conservative Party itself.’
WORST SET OF ECONOMIC CONDITIONS SINCE WW2:
Claim: The new Government has inherited the worst set of economic conditions since World War II
Reality: This is quite a statement given that inflation stood at 10.3 per cent when Margaret Thatcher became PM in 1979 – and had been nearly 30 per cent at times during the preceding Labour government.
While inflation has been high over the past couple of years, it is now down to two per cent – the Bank of England’s target. The employment rate for people of working age is now at 75 per cent. It was only 70.4 per cent when David Cameron became Prime Minister in 2010.
Claims that Britain is in a worse predicament than at any time since WWII are quite a statement given that that inflation stood at 10.3 per cent when Margaret Thatcher became PM in 1979
It is true that government debt as a share of Gross Domestic Product (the size of the economy) is at its highest since the early 1960s. But the public finances are clearly in better shape than when Labour’s Gordon Brown left office in 2010 with a budget deficit equivalent to 7.3 per cent of GDP. This year, it will be close to 3 per cent.
Of course, Reeves failed to mention the biggest single reason why government borrowing has been so high in recent years: the worst pandemic in a century, requiring many billions to be pumped into the furlough scheme and other measures to save people from losing their jobs.
Labour supported such spending at the time. Now Reeves wants us to forget about Covid and blame every-thing on Tory mismanagement.
