Labour is still not trusted to run the economy, shadow Chancellor Rachel Reeves admits

‘That is the conclusion people came to. And, in the 11-and-a-half years since we left office, we still have not found a way to break that narrative’

Rob Merrick
Deputy Political Editor
Wednesday 29 September 2021 09:23
Comments
Reeves pledges an annual £28bn on ‘green jobs’ to help defeat the climate emergency

The public still does not trust Labour to run the economy, more than a decade after the financial crash, the shadow Chancellor has admitted.

The party has yet to “break that narrative” that it caused the 2008 implosion, Rachel Reeves said – summed up by the notorious “there is no money” note left by Liam Byrne, a Treasury minister.

Ms Reeves has used Labour’s conference to announce new spending rules, including that a Keir Starmer government would not borrow for day-to-day spending.

But, asked why Labour still lagged behind the Tories for economic trust, she told a fringe meeting: “I don’t think we’ve broken this narrative that, as Liam Byrne said, there is no money left. That has stuck.”

The shadow Chancellor repeated that it had been a global financial crisis, but acknowledged: “It doesn’t really matter, because that is the conclusion people came to.

“And, in the 11-and-a-half years since we left office, we still have not found a way to break that narrative.”

The admission came at a Resolution Foundation event, which highlighted how the last decade was the worst in living memory for living standards.

Household incomes grew by just 9 per cent, way behind the first decade of the century (22 per cent), the 1990s (21 per cent), the 1980s (30 per cent), the 1970s (18 per cent) and the 1960s (19 per cent).

“That is not normal for the British economy,” said Torsten Bell, the think-tank’s chief executive. “So, the question is, why, when it’s a complete catastrophe, is Labour still behind the Conservatives on economic competence?”

George Osborne, the former Tory chancellor, successfully rammed home the message that Labour overspending caused the crash, although he later acknowledged the claim was false.

A recent Opinium poll found that – despite low growth even before Covid struck – the Conservatives lead Labour as the best party to run the economy by 41 per cent to 27 per cent.

Internal focus groups have confirmed that voters still fear that Labour would be unable to resist spending money it did not have.

In her conference speech, Ms Reeves carved out a divide with Rishi Sunak, the Chancellor, by pledging to spend £28bn-a-year on green jobs to fight the climate emergency.

But a key fiscal rule, to reduce debt as a share of national income, mimics the 2019 Tory manifesto – and Ms Reeves told the fringe meeting she “worried” about debt standing at 100 per cent of GDP.

Mr Bell said the tradition tax-and-spend election battle was over because the huge tax hikes announced by Boris Johnson and Mr Sunak meant “the death of low tax Conservatism”.

But Ms Reeves said that was “too simplistic”, because the key question is tax fairness – as Labour prepares to make the wealthy pay more, rather than workers through the National Insurance increase.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in