Rachel Reeves’ speech at the Labour Party conference had all the makings of good theatre: a lively audience, the compelling delivery of pre-rehearsed lines, and even a surprise appearance by an unexpected – and quickly removed – guest. Despite this, it lacked the one characteristic required to win over the critics: believability.
Following a summer of doom and gloom in which the Chancellor repeatedly warned of a ‘painful’ and ‘difficult’ Autumn Budget, today’s speech was an attempt to inject positivity and optimism into the discourse surrounding the economy. Among the promises to ‘rebuild Britain’, Reeves pledged there would be ‘no return to austerity’ (whether this was ever truly tried is dubious), and that Labour would ‘not increase the basic, higher or additional rates of income tax, national insurance, or VAT’. She also ruled out an increase in corporation tax, pledging to cap the tax ‘at its current level’ for the duration of this parliament.
Reiterating some of the Party’s manifesto promises, Reeves also recommitted to cracking down on tax avoidance, tax evasion and non-dom tax loopholes while highlighting the party’s commitment to ‘not raising taxes on working people’. She also pledged to create free breakfast clubs in primary schools in April 2025 and to introduce VAT on private school fees ‘to invest in our state schools’.
Although many of these promises have been shared before, the language of ‘Britain’s best days’ being ahead provided a striking change from the language of previous addresses which were dominated by promises of spending cuts, tax rises and increased borrowing. But has this change in tone come a little too late?
Late last week, results from the German market research company GfK showed that consumer confidence had fallen to its lowest levels since March of this year. The Consumer Confidence Barometer had been making gains over the last six months due to inflation slowing and wages continuing to grow, but these gains proved short-lived following Labour’s persistent warnings over the summer of having to make ‘difficult decisions’ on tax, public spending and welfare.
Moreover, can the Chancellor’s newfound optimism be believed?
A significant portion of Reeves’ speech today was unsurprisingly spent on attacking the Conservatives. ‘We must deal with the Tory legacy and that means tough decisions. But we won’t let that dim our ambition for Britain’, she said. But from the handling of the winter fuel allowance abolition to the freebies row, Labour’s first few months in office have left much to be desired.
Some of Labour’s promises in the build up to the election were genuinely exciting. On planning reform, they pledged to make revolutionary changes. Their ambition to build more homes and take on Britain’s Nimbys, something we have singularly failed to do in a serious way since the 1960s, are to be welcomed. Yet the first major housing story of the new Government was that it had increased housebuilding targets in areas which don’t need them and lowered them in places which do.
Boosting growth was a central plank of Labour’s offering. Doing this, both Keir Starmer and Rachel Reeves have acknowledged, requires making tough decisions. For Labour, this means standing up to their union paymasters and making sure that public sector productivity (which has remained flat since the Blair years) starts to pick up. On this front too, Labour have faltered. Three and a bit months into the job, they have genuflected to striking doctors and train drivers, offering them inflation-busting pay rises with no obligation to increase outputs.
For a Government which styles itself as the adults who have arrived to clean the mess left by the last residents of Number 10, this is all a very bad look. Based on her speech today, Rachel Reeves clearly recognises that her lines about being constrained by Tory incompetence are falling on deaf ears. But until the new Government starts to make genuine headway in tackling our chronic economic issues, changes in rhetoric alone aren’t going to cut it.
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