Rachel Reeves told how she has strived to persuade Britons to “trust me” with their money as polls showed her becoming the nation’s first female Chancellor within days.
As millions of voters across the country are making up their mind over who to back on July 4, she gave reassurances over Labour’s plans for taxation and the economy.
Speaking exclusively to The Standard, Ms Reeves said: “I remember when Keir appointed me to the job and he said by the time of the next election people have got to be able to trust me with their money.”
In a wide-ranging interview, the shadow chancellor:
- Spoke of how she wants to grow the City hit by Brexit and some companies listing in New York rather than London.
- Said she has “nothing against expanding airport capacity,” as Heathrow mulls a third runway, but stressed factors such as the environment needed to be considered.
- Told how the Metropolitan Police “needs to sort itself out” as Labour vows to halve violence against women and girls within a decade if it gets into power.
- Rejected easing visa restrictions so London’s hospitality sector can recruit enough staff, stressing: “We want to get immigration down not up so I’m not going to make that commitment.”
The Tories have thrown the kitchen sink at Labour on tax as they seek to persuade millions of voters not to trust Sir Keir Starmer’s party on the economy.
They cite the note left in 2010 by outgoing Treasury Chief Secretary Liam Byrne to his successor: “I’m afraid there is no money.”
So can the nation trust Ms Reeves on the economy and that a Labour government would not leave the public finances in such a state as 14 years ago, admittedly as it reeled from the financial crash.
“Absolutely,” she responded.
“In the three and a bit years that I have been shadow Chancellor the number one thing that I’ve set out to do is to ensure that people can trust me and do feel that they can trust me with their money which is why everything in our manifesto is fully costed and fully funded.”
In a swipe at ex-Prime Minister Liz Truss and her Chancellor Kwasi Kwarteng’s “mini budget,” she added: “I said we would introduce a new Charter for Budget Responsibility with tough spending rules, a fiscal lock so that never again can a Prime Minister and Chancellor try to force through a Budget without a forecast.
“So, what people can know with me is that as a former Bank of England economist I’m absolutely committed to that fiscal discipline, the tough rules that are needed to get our public spending under control and our public finances back under control too.”
Yet the questions on tax keep on coming, so are there any undisclosed Labour plans to hike levies on the banks in the Square Mile?
“Obviously, I worked in the City both at the Bank of England and then in the private sector in financial services, I see our financial services in the UK as a huge asset where there is huge potential to bring more jobs, to export more, to grow that part of the economy,” she said.
She stressed Labour had set out “limited tax changes,” such as on non-doms, extending the windfall tax, and changes around how bonuses are treated in private equity, before the phone line goes as she heads to the new constituency of Earley and Woodley in Berkshire, not somewhere Labour would have had on its possible wins radar until recently.
Sir Keir has said Labour will not raise taxes on “working people” which he later described as “people who earn their living, rely on our services and don’t really have the ability to write a cheque when they get into trouble”.
Given this, what reassurances could the shadow Chancellor give to wealthy Londoners over whether taxes could rise on unearned income?
“We have set out the tax changes that we need to make,” she replied, reeling of some of the rises already announced, before adding “beyond that there is nothing in our plans that would require further tax changes.”
Labour is banking on restoring healthy economic growth to Britain, which has been elusive in the post-Brexit years, so it can invest more than already announced into public services.
But what about council tax and whether it is fair that someone living at One Hyde Park pays less per year than someone living in an average home in Barking & Dagenham, London’s poorest borough (£1,946 v £2,002 a year).
“I want taxes to come down,” said Ms Reeves.
“But the focus of an incoming Labour government is going to be on growing the economy rather than on tinkering around with tax rates because in the end the way to make people better off is to bring wealth and prosperity, and good jobs, to London and across the UK,” said the Lewisham-born shadow Chancellor.
She stressed there would be “difficult decisions” including for example on planning.
Pressed on a third runway at Heathrow, she said: “We would need to look at all the evidence at that, but I have nothing against expanding airport capacity.
“I want Heathrow to be that European hub for travel.
“We would need to look at all the evidence including around the environment, but you know I back our airports.
“I back investing in infrastructure.”
Some hospitality chiefs in London are struggling to recruit enough staff and would like to see visa restrictions eased so these posts could be filled by workers from abroad.
But Ms Reeves stated: “Look, we want to get immigration down not up so I’m not going to make that commitment.
“We want to work with businesses to help them get the skilled staff that they need but immigration is close to a record high.
“We need to focus much more on helping people already in this country get back to work.”
She added: “We have a lower participation rate in the labour market than before the pandemic.
“We need to get those NHS waiting lists down, help people get back to work, make sure that the welfare system is really geared towards getting people back into work, that’s the answer, not just the lever of immigration.”
Labour is pledging to recruits hundreds more teachers and police officers for London but many public sector workers are simply unable to afford to live where they work in the capital so what would the party do to solve this dire situation?
Ms Reeves turned partly to the Mayor of London, explaining: “Sadiq in his time as Mayor has trebled the amount of affordable housing built, compared to what he inherited from Boris Johnson and we have made a commitment, an incoming Labour government to build 1.5 million in the first term of a Labour government.
“We will work with Sadiq and of course with our other mayors, but I recognise the chronic housing problems in London, to ensure that mix including affordable housing in London and including social and council housing in London.
“But in the end, we have got to increase the supply of housing if we are going to ensure that people can afford to buy a home of their own or indeed rent a place of their own.”
But if public sector workers are not able to live close to where they work, many of them end up paying ever rising train fares.
“We have got the biggest reform in a generation of our railways, bringing railways back into public ownership when those contracts come to an end, so that public transport is run for passengers and not for profit, that’s a commitment that we are making if we have the chance to form the next government,” Ms Reeves responded, though her words are unlikely to reassure some commuters.
Labour has been accused of being too timid in some policy areas, which is pushing some young voters towards other parties, such as the Greens.
Mr Khan has backed rent controls for the capital, so why won’t Labour do so?
“In the end the reason prices go up is because there is a mismatch between demand and supply so our focus is on increasing the supply of housing,” said Ms Reeves.
The Mayor also took a political risk with the Ultra Low Emission Zone extension to Outer London, so should Labour be bolder on climate change?
Ms Reeves, who Labour has claimed would be Britain’s “first green Chancellor”, insisted: “Our Green Prosperity Plan, the creation of both GB Energy, a wholly publicly-owned energy company where the returns go to the taxpayer, as well as the National Wealth Fund to invest alongside businesses in some of the jobs and industries of the future, while also looking to lower people’s bills, they are pretty bold and exciting moves.”
But again is Mr Khan being bolder on free school meals for all primary school pupils, a step that Labour has not adopted?
“We are committed to free breakfast clubs at all primary schools,” she said.
“But I think people understand the inheritance that an incoming Labour government will have if we have the privilege of forming the next government, we are not going to be able to do everything that people might want us to do.
“So we are focusing on those free breakfast clubs to ensure that all children get a really good start to the day and also to help mums and dads work more hours by being able to drop their kids off at school a little bit earlier, that will be our priority.
“But if we were going to start making more funding commitments, we would have to say where that money is going to come from and I’ve been really clear that everything in our manifesto will be fully costed and fully funded and that means that you have to say no to people who have got perhaps good ideas but you add them up and if you tried to do all these things it would mean higher taxes and I’m not prepared to do that.”
Labour’s manifesto lays out a “landmark mission to halve violence against women and girls in a decade”.
Asked whether the Met Police should be making tackling violence against women a higher priority, Ms Reeves said: “An incoming Labour government will make it a higher priority.
“It’s a real scourge on our society.
“I think something like 2.6 per cent of rape cases end up in a prosecution within the same year.
“So many people now just don’t even report rape and sexual crimes because they know that they are not going to get justice and that is a terrible state of affairs.”
She added: “The Met needs to sort itself out but also needs to make sure that these serious crimes are reported and then the evidence followed through to conviction.”
Tories in Chelsea and Fulham, and Kensington and Bayswater, two marginal seats, believe that Labour’s plan for VAT on private school fees, is swinging some voters their way.
“The majority of the children in those two constituencies go to state schools,” said Ms Reeves, a claim disputed by some Conservatives.
“And our commitment is to reinvest every single penny of that money (from the VAT change) into our state schools,” she added.
“I think most people would agree that the real challenges in our education system are those children who are at state schools where they are not being taught by qualified teachers, where there are not enough text books, pens, paper in the classroom, that those are the kids that are missing out on the first-rate education that businesses tell us is absolutely critical for them and their businesses.”
