Reeves slams “appalling” Tory growth record following Kwarteng speech

Rachel Reeves has accused Kwasi Kwarteng of showing no understanding of the government’s “appalling record” on growth following the Chancellor’s speech to Conservative Party conference.

Addressing conference this afternoon, Kwarteng admitted that the economic plans he had set out in the mini-Budget had caused “a little turbulence”. The Chancellor announced a U-turn on the government’s proposal to scrap the top rate of income tax earlier today.

The Chancellor said: “We need to focus on the job in hand. We need to move forward. No more distractions. We have a plan and we need to get on and deliver it. That is what the public expect from the government.”

Kwarteng declared: “With energy bills skyrocketing, a painful Covid aftermath, war on our continent, a 70-year-high tax burden, slowing global growth rates and glacially slow infrastructure delivery, we couldn’t simply do nothing. We can’t sit idly by. What Britain needs more than ever is economic growth.”

Commenting following the speech, the Shadow Chancellor said: “This speech showed us a Chancellor and a Tory government completely out of touch, with no understanding on its own appalling record on growth.

“What the Chancellor called a ‘little financial disturbance’ is a huge economic body-blow to working people that will mean higher prices and soaring mortgages. That’s the Tory economic premium. This is an economic crisis made in Downing Street, paid for by working people.

“The Tories have damaged the UK’s reputation on the global stage and left us all worse off. The fact the Bank of England had to step in with a £65bn bailout out with taxpayers money is deeply shameful. They must reverse this Budget and abandon their discredited, dangerous trickle-down approach.”

The mini-Budget, delivered by Kwarteng last month, set out a series of tax cuts, including scrapping the top rate of income tax for the highest earners, cancelling a planned rise in corporation tax and reversing the increase in National Insurance.

The Chancellor also confirmed plans to scrap the cap on bankers’ bonuses, which was imposed following the 2008 financial crash.

Reacting to Kwarteng’s speech today, Unite general secretary Sharon Graham said: “The Chancellor says we need a new approach. He’s right. So let’s have pay rises for the people, not bonuses for the bankers.

“It’s time for a workers’ economy, not more deregulation and a race to the bottom. Trickle down doesn’t work and attacking unions won’t work. The only answer is to put money in people’s pockets through proper pay rises, not giveaways to profiteering corporations.”

The Bank of England was forced into emergency action last week amid concerns that the plans set out by Kwarteng could lead to mass insolvencies of pensions funds.

The Bank pledged to buy £65bn of government bonds over the next fortnight. It said its decision to buy the bonds at an “urgent pace” was driven by concern over “a material risk to UK financial stability”.

The International Monetary Fund criticised the government’s plans in a statement, declaring that the measures will “likely increase inequality”.

Labour has demanded that parliament be recalled early from recess to reverse the mini-Budget. Reeves declared last week that Tory MPs who do not join the opposition’s calls will be “complicit in this reckless bout of economic self-harm”.