A Tale of Two Budgets: Rachel Reeves is Fixing the Foundations to Deliver Change
This Labour government has rightly defined itself politically against the chaos and choices unleashed on our economy and public finances over the course of 14 years of Conservative government.
But in last week’s Budget that political contrast was sharpened with the clarity that only comes from pounds and pence detailed in Treasury spreadsheets. In every way possible this Budget represented a clean break from Tory economic vandalism.
The unfunded and unrealistic spending commitments inherited from the Tories, the £22bn blackhole they left behind, the desperate state of public services, and the economic imperative to restore the public finances combined to mean that the Chancellor had an unenviable task on her hands.
In the face of such challenges she, and this Labour government, knew that the ‘burying heads in the sand’ approach favoured by the Conservative Party was not an option. Instead, the Chancellor sought to turn the page on the last 14 years and take the tough decisions to secure our country’s long-term future.
So how exactly is Labour’s approach different to the economic decisions taken by previous Tory Chancellor’s?
First, this Budget means that working people won’t face higher taxes in their payslips and provides a pay rise to 3 million workers on the National Minimum and National Living Wage. Hospital waiting lists will be cut and we will be investing in Britain’s future to fix our schools, hospitals and broken roads. It also delivers desperately needed funding to begin rebuilding our justice system.
In contrast the Tories have learned nothing from their defeat. Kemi Badenoch must explain where the cuts to state schools will bite after promising unfunded tax breaks for private schools – no wonder she refused to condemn Liz Truss whose Mini Budget crashed the economy.
We are choosing to protect working people and that means making fair choices on taxation to increase funding for public services. Tory austerity and incompetence was destined to destroy both the economy and public services. Labour’s Budget is designed to restore both.
Second, this Budget respected economic institutions. Infamously, Liz Truss sidelined the OBR and took a slap-dash approach to financial planning and – in a sign that the Conservatives haven’t learned anything at all – Tory leadership candidates spent most of the campaign continuing to pour scorn on our financial institutions. Labour’s Budget gave the OBR time to prepare full and detailed scrutiny of our plans; it’s set out plans for three-year spending reviews to take place every other year, with five-year capital budgets for long term planning. This will support growth and value for money in public services.
Third, and in some ways most importantly, Labour’s first Budget in 14 years shows the long-term, patient, approach to building a more prosperous economy that will bear fruit. The OBR is clear that our investment plans will lead to the economy being bigger in the long-run, and will come alongside our plans to transform our planning rules to get Britain building again to boost economic growth and living standards.
In my role as the Growth Mission Champion, I’ve seen the positive steps we’ve taken in just five months to repair our economic foundations, but I am also clear that there is still lots more to come in the five years ahead.
But the benefits of a Labour government are that these continued changes are within our grasp now. We are no longer having to watch from opposition as the Tories torch our economy and public services. Now, it’s all hands-on deck to make sure that this Budget is just the beginning of the brighter future the British public voted for in July.
If you enjoyed this piece, follow the link here to read another piece analysing the Budget
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