Rachel Reeves - an growing economy for everyone
Rachel Reeves - an growing economy for everyone

With all the drama surrounding the government’s rather disastrous mini-budget. Here is a refreshingly intelligent approach from Rachel Reeves’ conference speech. To read the full speech please click here.

“It is such an honour to stand here now as your Shadow Chancellor, under the leadership of Keir Starmer.

Our economy is about all of us. It’s the businesses which give life to our high streets. And it’s the tens of millions of people who care for the young, the old and the disabled. Who drive the buses, trains and taxis which get people to work every morning. Who make sure we are provided with gas, electricity and water. Who keep us safe from harm. Who make sure stock reaches our supermarkets.

Our schools, hospitals and care homes, and our most vaunted industries, rest upon these foundations. And the jobs and industries of the future will too. It’s what I call the everyday economy.It is what keeps Britain going and forms the beating heart of our economy even if too often that work is hidden from sight.

Conference look at the pandemic. It wasn’t the shareholders at outsourcing companies that got us through this crisis. Our kids weren’t banging pots and pans on their doorsteps for management consultants.

What got us through were the millions who put their health at risk to do indispensable work: the care workers; the delivery drivers; the cleaners; the supermarket workers; the staff in our NHS, our schools and all our frontline services.

This government is out of touch. They have no idea of the challenges people are facing. And they have no respect for the people who’ve got us through this pandemic and keep our economy going. Here’s an alternative: On Saturday, our deputy leader Angela Rayner set out Labour’s new deal for all workers.

  • Zero hours contracts banned.
  • Fire and rehire outlawed.
  • Sick pay increased.
  • Maternity pay, parental leave and flexible working from day one.
  • And a higher living wage with fair pay agreements going above and beyond the minimum.
  • Security. Fairness. Dignity. Respect.

That is what a Labour government will do.

I spent the best part of a decade as an economist at the Bank of England. My job was to analyse how the economy performed. So let’s look at the UK’s economic performance. Even before the pandemic:

  • Growth rates falling behind our peers;
  • Productivity flatlining;
  • Our trade balance plummeting;
  • Gaps between and within our regions growing;
  • Inequality widening;
  • Pay growth stalling.

And the Conservatives missing every one of the debt and deficit targets they set for themselves.

With inflation rocketing people are feeling the squeeze at the supermarket checkout, the petrol pump and when their energy bills arrive as little luxuries move further out of reach. We know that our national economy does well when the everyday economy is thriving. Because money that goes into the pockets of working people is money spent in shops, cafes and restaurants, creating growth and bringing shared prosperity. And if we want to drive up Britain’s productivity and wages with it, then it’s not just a few firms at the top but all our businesses, large and small who need to be feeling the benefits of new technologies and investment.

And when our everyday economy is neglected it creates insecurity which leaves us exposed when a crisis hits. Instead of unlocking all that untapped potential in every community their instinct is to hang onto power and outsource responsibility to their corporate friends; to put short-term savings ahead of Britain’s long term economic security; to ignore inconvenient truths coming from employers as well as trade unions; and to treat elected local, regional and national leaders in Britain with contempt…

And then they have the gall to make working people foot the bill for their failings.

Labour’s approach will be based on working together with businesses, workers and public bodies all pulling together in a national endeavour to rebuild Britain and to seize the opportunities of the future.
It’s what Labour’s plan to buy, make and sell more in Britain is all about, using all the tools at government’s disposal to support businesses in this country…

This new approach, this spirit of partnership, is going to be at the heart of how we build that stronger everyday economy. Labour will lead a new era of industrial strategy working hand-in-hand with trade unions and with businesses. This is about helping British business lead the world in growing high-tech industries like life sciences, electric cars and renewable energy but we will do something that’s never been done before. We will have industrial strategies for the overlooked industries that make up our everyday economy sectors which have never before been the focus of industrial strategy like retail, hospitality and care. A fresh approach means we need to look again at how our tax system works.

Good public services have to be paid for.

Today I want to share the principles that underlie our approach to taxation.

  • First, we will make the tax system fairer, ensuring that the burden isn’t just falling on the wages of working people, but that those at the top pay their fair share, too.
    • Conference, how can it possibly be right that a police constable on £27,000 should be taxed at 32 pence in the pound, but someone making many times more from buying and selling stocks and shares should pay just 20 pence in the pound?
    • I pledge that as Chancellor I will not be balancing the books on the backs of working people.
  • And here’s our second principle: We will bring a laser focus to efficiency in our tax system.
    • There are hundreds of different tax breaks.
    • Some are important, but too many simply provide loopholes for those who can afford the best advice.
    • And added together they cost more than our entire NHS budget.
    • So we will look at every single tax break.
    • If it doesn’t deliver for the taxpayer or for the economy then we will scrap it.
    • Right now, private schools enjoy charitable status which makes them exempt from both business rates and from VAT at a cost to the taxpayer of £1.7bn every year. But conference here’s the truth: Private schools are not charities. And so we will end that exemption and put that money straight into our state schools.
  • And here’s our third principle we will support our high streets. Four out of five retail businesses are warning they may have to close outlets if government doesn’t act.
    • So today we are calling on the government to freeze business rates next year to increase the threshold for small business rates relief, giving small and medium sized businesses in all sectors a discount next year.
    • To pay for those measures the government should increase the Digital Services Tax to 12% for the next year, to make sure online companies that have thrived during this pandemic are paying their fair share.
    • High street businesses pay over a third of business rates, despite making up only 15% of the overall economy.
    • But when Amazon’s revenues went up by almost £2bn last year. How much did their tax go up? Less than one percent.
    • So I can announce today that the next Labour government will scrap business rates.
    • And here is our guarantee: The system we replace it with will incentivise investment; promote entrepreneurship; reward businesses that move into empty premises.
    • And no public services or local authorities will lose out from these changes.

Together, these principles of taxation – prizing fairness, efficiency, and support for business – comprise our approach to funding our public services. The next Labour manifesto will set out a plan to raise living standards and opportunities across Britain. But we can’t tolerate waste when it comes to public spending. Especially when it comes to the wasted money that goes to outsourcing companies.

So I promise you that the next Labour government will carry out the biggest wave of insourcing in a generation. During the pandemic £2bn was spent on government contracts awarded to friends and donors of the Conservative Party. Conference: let’s review some of the highlights of the Tories’ pandemic outsourcing bonanza.

  • £90 million to one business which had donated £400,000 to the Conservative Party, not a bad return on their investment.
  • £150 million to a financial services firm to produce 50 million facemasks that couldn’t be used!
  • £350 million to a company employing a sitting Tory MP, for test kits which had to be recalled.
  • £30 million to Matt Hancock’s pub landlord. And every single one of those cheques signed by Rishi Sunak.

That is not what a Labour government would do. To those who have secured covid contracts and have not delivered. I give you notice. We expect that money back.

We will set up a team to go through every line of every failed contract where value was not delivered, and clawback every penny of taxpayers’ money we possibly can. Because that money belongs in our police. It belongs in our schools and it belongs in our NHS.

We will bring an absolute commitment to value for taxpayers’ money for every pound we spend and policy we implement. The last Labour government granted operational independence to the Bank of England. It was a powerful and lasting contribution to Britain’s long-term economic stability. And in 2010 George Osborne created the independent Office for Budget Responsibility.

It’s thanks to the OBR that we know the Tories have missed every one of their debt and deficit targets. Thanks, George, we’ll keep that. The next Labour government will make its own contribution to Britain’s economic architecture.

I do not take lightly the responsibility to see that public money is spent wisely and our public finances kept under control. Where the Tories have brought us ballooning debt, supply chain mayhem and spiralling inflation, we embrace fully our role as the party of long-term economic stability, of secure public finances and of economic growth. We will put in place fiscal rules that will bind the next Labour government to ensure we always spend wisely and keep debt under control, so that we have the means to transform schools, hospitals and communities, and pay for investment in the new industries and jobs that our country desperately needs.

We will work across our industries to tackle climate change, putting fairness alongside our environmental obligations, and ensure the solutions are developed with workers and trade unions, not imposed upon them. Labour will meet the challenge head on and seize the opportunities of the green transition.

Let me tell you today what I will do as your Chancellor.

  • I will invest in good jobs in the green industries of the future;
  • Giga-factories to build batteries for electric vehicles;
  • A thriving hydrogen industry;
  • Offshore wind with turbines made in Britain;
  • Planting trees and building flood defences;
  • Keeping homes warm and getting energy bills down;
  • Good new jobs in communities throughout Britain.

In other words: protecting and strengthening our everyday economy.
And to make this a reality, to unlock that potential, and protect our planet for future generations.

I can announce today that I am committing the next Labour government to an additional £28bn of capital investment in our country’s green transition for each and every year of this decade.

I will be a responsible Chancellor. I will be Britain’s first green Chancellor. Our mission starts with the everyday economy. With valuing and supporting the people, businesses and industries which kept Britain going before the pandemic, have done throughout, and will continue to do so.”


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