Reeves attacks Osborne scheming over leadership and publishes alternative Budget

Rachel Reeves has raced out of the blocks ahead of next week’s Budget by publishing her own wishlist of reforms and attacking George Osborne for placing Britain’s economic needs at the mercy of the Tory leadership race.

Reeves, a former shadow Work and Pensions Secretary, accused Osborne of reducing critical decisions on national prosperity to “moves in an inward-looking and essentially short-sighted game” with rivals for 10 Downing Street.

She also called for investment in infrastructure, including broadband and flood defences, greater support for vocational education and improved access to finance for small businesses.

The speech, at the Social Market Foundation, burnishes her economic credentials before the Budget on Wednesday 16 March. Reeves, a former Bank of England economist, has been touted as a possible shadow Chancellor in the event Jeremy Corbyn were deposed and replaced by a “moderate” from the backbenches.

She said Osborne was distracted by “outmanoeuvring” Boris Johnson and winning support from Tory backbenchers in the run-up to David Cameron’s retirement – which will come before 2020.

Reeves also issued a warning over the “immediate risk” to jobs, exports and investment from the EU referendum and highlighted Osborne’s failure to met his deficit targets.

“The truth is, indulging a tired and dangerous Tory agenda of state-shrinking, laissez-faire, trickle-down ideology was always more important to George Osborne than either deficit reduction or economic rebalancing…

“If slowing growth projections mean that further spending cuts or tax rises would be needed to meet the Chancellor’s surplus target, then he should rethink his target, not add to the squeeze on families, businesses, and public services.

“This, after all, is what the Chancellor did repeatedly in the last Parliament, when his attempt to cut too far and too fast choked off the recovery that had started in 2010.”

Reeves also listed a series of reforms she would like to see introduced by the Chancellor next week:

– a flat rate of pension tax relief to support saving by people on ordinary incomes;

– better childcare provision for parents who want to work, instead of planned cuts to inheritance tax;

– the proceeds of recent falls in borrowing costs to be re-invested in initiatives to improve business’ access to finance and priority infrastructure projects identified by the Adonis Commission;

– a “fiscal framework” to ensure Britain bears down on government borrowing and debt at the same time as enabling the British Business Bank, Green Investment Bank and a new National Infrastructure Bank to raise private capital for self-financing investments to strengthen the economy and boost tax revenues.