Ex-Bank of England boss endorses Labour as Rachel Reeves vows to ‘rebuild’ economy after Tory ‘misrule’

Mark Carney says ‘beyond time’ for a Labour government in major coup for opposition

Adam Forrest,Archie Mitchell
Tuesday 10 October 2023 10:10 BST
Rachel Reeves says Labour will 'rebuild' Britain's economy after 'wreckage of Tory misrule'

The former governor of the Bank of England has endorsed the Labour Party in a major coup for Sir Keir Starmer and his shadow chancellor Rachel Reeves.

Mark Carney – who enjoyed a close working relationship with Tory chancellor George Osborne – said it was “beyond time” for Ms Reeves to run the economy in a Labour government.

The Canadian, who ran the Bank of England from 2013 to 2020, said Ms Reeves was a “serious economist” who “understands the big picture” in a surprise video message after her conference speech in Liverpool.

His comments came after Ms Reeves promised a Labour government would “rebuild Britain” – warning the country to “never trust the Tories with our economy ever again”.

In a speech which received several standing ovations, Ms Reeves:

  • Promised a crackdown on government waste to save an estimated £4bn
  • Announced Labour will hold an inquiry into the failure to build HS2
  • Revealed a planned crackdown on the use of private planes by ministers as she mocked Rishi Sunak
  • Pledged a new Covid corruption commissioner with a “hit squad” of investigators
  • Vowed to protect the independence of the Bank of England and Office for Budget Responsibility

In a move met by gasps in the conference hall, her speech was followed by a video message from Mr Carney, the 58-year-old who was hand-picked by Mr Osborne to be governor.

He said: “Rachel Reeves is a serious economist. 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. It is beyond time we put her energy and ideas into action.”

His backing represents a major coup for Labour. A spokesperson for Ms Reeves said the endorsement sends “a very clear signal” that Labour is ready to fight the Conservatives on the economy.

Shadow chancellor Rachel Reeves making her Labour conference speech (PA)

Mr Osborne at the time described Mr Carney, who was the first foreigner to run the central bank in 318 years, as “quite simply the best qualified person in the world” for the job. Such was Mr Osborne’s admiration for the Canadian, that he struck a deal to secure Mr Carney allowing him to serve a five-year term instead of the expected eight.

Ms Reeves borrowed an attack line used by David Cameron ahead of the 2015 general election, telling voters they can choose between “five more years of Tory chaos and uncertainty” or “a changed Labour Party offering stability”.

In a stinging attack, Ms Reeves asked those gathered: “Is there anything in Britain that works better than when the Conservatives came into office 13 years ago?”

Labour vowed to protect the independence of institutions such as the civil service and the Office for Budget Responsibility, which have been dubbed part of a “blob” by senior Tories.

Former Bank of England boss Mark Carney (PA Archive)

She said Labour will mandate that all significant tax and spending decisions are subject to independent forecasts to avoid “a repeat of the devastation Liz Truss and the Tory Party have inflicted on family finances”.

Ms Reeves also announced that Labour would launch an independent expert inquiry into lessons learnt from the government’s failure to build HS2, to be led by shadow transport secretary Louise Haigh.

Attacking the Tories for allowing costs to balloon, she said: “If I were in the Treasury, I would have been on the phone to the chief executive of HS2 non-stop, demanding answers and solutions.”

She also announced a £4bn clampdown on government waste, with a target to reduce spending by half over the next parliament. Labour will appoint a “Covid corruption commissioner” in the hope of recovering up to £2.6bn lost to fraud.

She confirmed plans for reforms to the “antiquated” planning system to make it quicker and easier to build the infrastructure needed for modern industries and clean energy networks.

Ms Reeves also confirmed that her first budget would crack down on the tax perks enjoyed by private schools – telling Rishi Sunak to “bring it on” if he wanted a fight on the issue at a time when children in state schools were being taught in temporary classrooms due to crumbling concrete.

She also revealed a planned crackdown on the use of private planes by ministers as she mocked Mr Sunak’s travel habits, suggesting his love of flying was because he was scared of meeting voters.

Mr Carney’s endorsement came after high street supremo Mary Portas introduced Ms Reeves to the stage, saying she is going to be “Britain’s first female chancellor in 800 years” and would be “the best qualified chancellor Britain has ever had”.

Responding to the speech, Tory chancellor Jeremy Hunt attacked Labour’s plans to borrow £28bn a year by the end of its first term in government to invest in green energy “a fairy-tale for the British economy with no happy ending”.

Mr Hunt said: “Borrowing more doesn’t solve problems, it creates them – the worst kind of short termism when instead we should be taking long-term decisions that will actually tackle inflation and unleash growth”.

He also pointed out that Ms Reeves failed to use the term “inflation”. But Labour fired back that Mr Hunt “doesn’t know what inflation means” – pointing out that she talked about prices going up.

Ms Reeves won union and business backing for her speech. CBI chief executive Rain Newton-Smith said business leaders will be “encouraged” to hear her speak so “ambitiously” about investment. The TUC’s general secretary Paul Nowak said Labour had offered the “boost to living standards this country has been crying out for”.

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