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Rachel Reeves Unveils Labour’s Economic Plans

Shadow Chancellor Rachel Reeves delivered a speech at the Labour Party conference this afternoon outlining several key economic proposals and priorities for the Labour Party to prevent future governments from behaving irresponsibly with public finances.

Rachel Reeves’ strategy

Rachel Reeves outlined how a Labour government “will not waver from iron-clad fiscal rules,” in a move to showcase the party’s fiscal responsibility ahead of the upcoming general election, scheduled to be called before the end of 2024. 

“We will protect the independence of the Bank of England, the Office for Budget Responsibility (OBR), and our civil service,” she said.

As Chancellor, Reeves intends to introduce a new charter for budget responsibility that would require any government making significant tax and spending changes to be subject to an independent forecast from the Office for Budget Responsibility (OBR).

The announcement follows the tumultuous events of last year when former Prime Minister Liz Truss and Chancellor Kwasi Kwarteng introduced a disastrous mini budget that crashed the financial markets and had been put in place without an OBR forecast. 

Restoring credibility

“Never again will we allow a repeat of the devastation that Liz Truss and the Tory party have inflicted on family finances,” Reeves said.

“Liz Truss might be out of Downing Street but she is still leading the Conservative Party.

“Out of the wreckage of Tory misrule, Labour will restore our economic credibility, we will lift our living standards, make work pay, rebuild our public services, invest in homegrown industries in every corner of our country, and together we will get Britain its future back.”

The shadow chancellor delivered her speech to a packed conference hall, where many were turned away at the entrance due to the hall exceeding its capacity. This was disappointing for some delegates who had paid for VIP seats.

Following the speech, a Labour representative joked to reporters that “it’s a sign of a changed Labour Party when you get a round of applause for the Office of Budget Responsibility”.

During her address, the shadow chancellor emphasised that Labour must get into government to translate their principles into action. She noted that for the past 13 years, they had the “power to talk but not the power to do”.

The global age

Reeves also stressed the necessity for a “new business model for Britain” and advocated for a “new age of security” to ensure the UK doesn’t depend on a few countries for resources. 

She said that traditional globalism was no longer relevant, given the vulnerabilities exposed by disruptions in global supply chains.

“Globalism as we once knew it is dead,” she said.

“Disruption to supply chains that span the globe has revealed the perils of prizing only the fastest and the cheapest, and our ability to make the things essential to our security has been depleted.

“It is no longer enough for the government to turn a blind eye to where things are made or who is making them, to run an economy based on the contributions of only a few people.

“A changed world demands a new business model for Britain.”

Reeves introduced the concept of “securinomics,” asserting that the UK should increase domestic production to reduce exposure to global shocks and prioritise the interests of working people in rebuilding the economy.

Other promises

In her speech, Reeves also announced Labour’s intention to establish a “Covid corruption commissioner” tasked with taking necessary actions to recover taxpayer funds lost to Covid-related fraud.

She reiterated Labour’s policy to eliminate the tax loophole that grants private schools an exemption from paying VAT and business rates. She also stated that, if the party comes to power, they intend to allocate that money towards supporting the 93% of children enrolled in state schools.

Towards the end of her speech, a brief video featured Mark Carney, the former Governor of the Bank of England, endorsing Reeves as a potential future chancellor. 

“Rachel Reeves is a serious economist,” he said.

“She began her career at the Bank of England, so she understands the big picture, but, crucially she understands the economics of work, of place and family. 

“And, look, it is beyond time we put her energy and ideas into action.”

Final thought 

Rachel Reeves speech offers a promising vision for the UK’s economic policy, focusing on fiscal responsibility, independence, and innovative approaches to economic security and fairness, marking a stark departure from the tumultuous events of the past year when Liz Truss and Kwasi Kwarteng’s ill-considered mini-budget sent shockwaves through the financial markets.

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