Rachel Reeves will draw economic battle lines ahead of Tuesday’s next general election, challenging the government’s claims that the economy is turning a corner while millions of people continue to struggle to make ends meet. be.
The Shadow Chancellor accuses Rishi Sunak and Jeremy Hunt of “gaslighting” the UK economy with overly optimistic comments that are “out of touch” with how the majority of people live. right.
Mr Reeves said Labor would draw on the “new economic thinking” of European and American leaders and would argue that the government “crashed a car and left it on the side of the road” when it came to Britain’s finances. .
Mr Sunak will try to reset the government again this week after a disastrous series of local elections in which the Conservative vote suffered crushing defeats in parliaments across the country and lost the flagship West Midlands mayoral race.
Mr Sunak said on Monday that his Conservative Party was struggling to close the gap with Labor in the polls and that many of his MPs were likely to admit defeat privately. He insisted that the results were not a “foregone conclusion.”
Conservative plotters had warned that a poor outcome could be at great risk to Mr Sunak, but the rebels had secured enough MPs to push through a motion of no confidence in the leader. He admitted that he could not be persuaded and put down his weapon.
The Prime Minister said he was “absolutely determined” to continue fighting to show the government was making a difference on issues such as the economy, citing lower taxes and lower inflation, ahead of polling day scheduled for this autumn. Stated.
The government will on Tuesday announce a scheme to help long-term sick people return to work will be piloted in 15 areas of England, as part of sweeping changes to the welfare system that have been criticized by disability groups.
In a speech in the City of London, Mr Reeves claimed Mr Sunak’s message to voters that the economy was improving was “deceptive” ahead of a raft of economic data the government hoped would reverse fortunes. I plan to.
The Bank of England’s latest decision on interest rates will be taken on Thursday, with economists expecting the benchmark rate to remain unchanged at 5.25% despite pressure from the government to start cutting rates before the election.
Ministers are expected to report on Friday’s quarterly GDP figures, which are expected to show Britain has emerged from recession, and inflation figures later this month, which are expected to show the World Bank is on track to hit its 2% target. They may be even more encouraged.
Reeves would tell business leaders: “By the time of the next election, we can and should hope that interest rates have been cut, the UK is out of recession, and inflation is back on the Bank of England’s target. Certainly, these things could happen this month. There is a gender.
“We already know what the Prime Minister would say if one or all of these events happened. He has said in recent months that the economy is turning a corner, that our plans are working, that we are Please stick to it.” I want to meet these arguments head-on because they do not reflect economic reality. ”
Labour’s internal research shows that people are still feeling the pain of high inflation and mortgage rates, and that the Conservatives’ claims of improving the economy are deeply unpopular with the voters they need to win back at the next election.
Focus group respondents said the economy was “damaged,” “fragile” and “unbalanced,” and party strategists said that even by the election, people’s situation would start to worsen. Even so, I don’t think the government will benefit from it.
“During local elections, I traveled all over the country. I spoke to hundreds of people. I listened to their stories,” Reeves would say. “And when you hear government ministers saying things have never been this good and that you should watch out for the ‘feel-good factor’, what they hear is that the government has been deceived. It’s just that it’s completely out of touch with the reality on the ground.” The Conservative Party is gaslighting the British people. ”
Labor intends to fight the election on the economy, believing the government’s response to global pressures and Liz Truss’ disastrously tiny budget has ruined the Conservative Party’s reputation for economic prowess, but Keir Starmer’s party currently presents a more stable alternative.
Mr Reeves said Labor would deliver a boost to the economy, including a Wealth Fund to support private and public investment, changes to planning laws to build 1.5 million homes and the creation of 650,000 jobs in Britain’s industrial heartlands. Emphasize your plans.
But the shadow chancellor, who tends to be cautious in his economic ambitions, will add: I am not underestimating the challenges we face. ”
Economists say whoever wins the general election will face very tough choices on taxes and spending to avoid further fiscal deterioration.
The Institute for Fiscal Studies and the Resolution Foundation said the economic legacy facing the next government will likely be one of the most dire faced since World War II.
But Reeves will argue that the constraints to Britain’s potential can be overcome “not by immutable force” but by “vision, courage and responsible government”, and will point to more proactive approaches in other countries.
“The vision is to pursue a different approach, leveraging the new economic thinking that is shaping governments in Europe, America and around the world, but this conservative government is resisting it,” she added.
Labor will focus on supply-side reforms and a green industrial strategy, drawing inspiration from Joe Biden’s plan to tackle inflation and create jobs in the US, as well as expanding government’s role in running a free market economy. I’m trying to get .
Liberal Democrat leader Ed Davey will table a no-confidence motion in the government when Parliament reconvenes on Tuesday to try to pressure Mr Sunak to call a general election in June, but it is unlikely to pass.
