Embattled Rachel Reeves urges public to be patient with Labour on rescuing economy

Independent

5 days ago

Rachel Reeves has urged the public to be patient with Labour on the economy, saying that the change they voted for in last summer's election was 'never going to happen overnight'.
The chancellor insisted she was 'impatient' to deliver and said ministers had made a start on turning things around, but there was 'lots more to do' as she blamed the last Tory government for the nation's financial problems.
Her comments come just days after the Bank of England warned the public of months of sharp price rises ahead, driven by higher food costs.
The central bank said Ms Reeves's national insurance contributions hike and the rise in the minimum wage were helping to push up the cost of the supermarket shop. It also slashed interest rates to 4 per cent, in a bid to boost the UK's stumbling economy.
Ms Reeves has also been warned of a £50bn black hole in the government's finances, which leading economists say means she may have to raise taxes, cut public spending, or tear up her fiscal rules in order to fill.
The forecasts piled pressure on the chancellor, less than 24 hours after Sir Keir Starmer pledged that this autumn's Budget would make sure 'people feel better off'.
But in a piece for the Sunday Mirror, Ms Reeves cautioned that this would take time.
She said her 'mission' was to 'end the cycle of decline, tackle the unfairness in our economy, give every community the chance to thrive and to make the lives of every working person better off'.
But she warned: 'I'm impatient for the change people voted for to be delivered, but I have always known it was never going to happen overnight.'
She hit out at the last Tory government, which Labour has accused of leaving a £22bn black hole, which Ms Reeves had said she had to grapple with when she entered the Treasury last year.
She wrote: 'We know whose side we are on – the side of working people who for too long have seen promises made but never delivered, because politicians ducked the big decisions.' She also accused the Tories of presiding over ten years of 'endless spirals of chaos'.
The progress that has been made so far includes trade deals with the United States, India and the European Union, she added.
Earlier this week, the Bank of England said headline inflation would accelerate to 4 per cent by September, while inflation on food is set to hit 5.5 per cent between now and Christmas – putting a squeeze on household budgets.
And Sir Keir Starmer opened the door to increasing tax rises this autumn, declining to explicitly rule out breaking Labour's manifesto pledge not to raise VAT, income tax and corporation tax.
It came after the National Institute of Economic and Social Research (NIESR) – a leading economic think tank – said the chancellor could also look at spending cuts in the autumn Budget as a way to raise the money needed by 2029-30 to remedy a £41.2bn shortfall on her borrowing targets, set out by her self-imposed 'stability rule'.
To restore the almost £10bn 'buffer' that the government has maintained since last year's Budget, the chancellor would have to raise a total of £51.1bn, they warned.