Labour announces sweeping economic reforms in promise to ‘rebuild Britain’

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LONDON – Shadow chancellor Rachel Reeves responds after Chancellor of the Exchequer Jeremy Hunt delivered his autumn statement to MPs in the House of Commons.

House of Commons/PA Images via Getty Images

LIVERPOOL, England — Britain’s main opposition Labour party on Monday vowed to “rebuild Britain” if it wins the 2024 General Election, as Shadow Finance Minister Rachel Reeves announced a host of new economic pledges aimed at stimulating growth.

In a confident speech to a packed exhibition hall in Liverpool, Reeves said Labour would fight the next election on the economy but said “change will only be achieved on the basis of iron discipline.”

“You cannot tax and spend your way to economic production. The lifeblood of a growing economy is business investment,” Reeves said, further cementing the party’s recalibration in recent years as a centrist, pro-business alternative to the ruling Conservatives.

“It is investment that allows businesses to expand and create jobs and compete with international rivals, with new plants, factories and research labs coming to Britain, not France or Germany or America.”

Promising “ironclad fiscal rules,” Reeves announced that Labour would implement a Charter for Budget Responsibility that would mean any significant changes to tax policy must be accompanied by an independent forecast from the Office for Budget Responsibility.

This was a thinly-veiled dig at former Prime Minister Liz Truss, whose “mini-budget” last year involving a series of unfunded tax cuts sent markets into turmoil and culminated in her resignation after just six weeks in the job. Truss and then-Chancellor Kwasi Kwarteng opted not to seek an independent appraisal from the OBR, breaking with traditional norms of economic policy.

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Prime Minister Rishi Sunak is under pressure from some within his ruling Conservative Party to cut taxes, with Britain’s tax burden sitting at a 70-year high.

Labour holds around a 20-point lead over the Conservatives across most major polling, with the ruling party damaged by a string of scandals and the fallout from Sunak’s predecessor Liz Truss’s “mini-budget.”

Reeves said Labour would establish a Covid Corruption Commission to investigate and recoup the billions of pounds of taxpayers’ money lost to fraud via pandemic support programs, along with cracking down on ministers’ use of private jets — an overt swipe at the current prime minister.

In order to catalyze and de-risk business investment, Labour would create a new national wealth fund, Reeves also announced.

“We will set that new national wealth fund a target: for every pound of investment that we put in, we will leverage in three times as much private investment,” she added.

Reeves also announced an overhaul of the country’s planning system to speed up infrastructure projects, which she claimed will unlock a further £50 billion ($60.97 billion) of private investment.

She called the infrastructure plan a “once in a generation set of reforms to accelerate the building of critical infrastructure for energy, transport, and technology,” and added that Labour intends to “fast-track battery factories, life sciences and 5G infrastructure and to tackle the litigation which devours time and money before we ever see shovels in the ground.”

Labour will also abolish the non-dom tax status (where someone lives in a country but is not legally domiciled in it), levy VAT on private school fees and impose a “proper” windfall tax on energy company profits in order to ease the burden of higher energy prices on households.

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The shadow chancellor’s tax pledges were greeted with rapturous applause among the party’s members, as was her announcement that she intends to deliver her next conference speech as Britain’s first female chancellor of the exchequer.

Chancellor Jeremy Hunt slammed his opposite number for her borrowing plans and for failing to address inflation as the gravest threat to the British economy. Though falling, U.K. inflation came in at 6.7% in August, remaining well above the Bank of England’s 2% target.

“Oops … when the biggest single issue for the economy is inflation it doesn’t get ONE mention from the Shadow Chancellor?” Hunt said in a tweet.

“Because adding £28 bn a year to borrowing will push it up – meaning higher mortgages, higher debt interest and lower growth.”

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