Rachel Reeves MP: speeches

Speeches

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  First, specifically on the black hole, we could not have known these numbers because the Conservative party did not tell the OBR these numbers. That is why we are in the position we are in today. That is the biggest scandal of them all. The shadow Chancellor asks about the estimates. He should recognise the estimates we laid yesterday because he produced them. We had to lay those estimates to allow public spending to continue, but since those estimates were produced, information was given to us by Treasury officials about the true scale of the overspending by the Conservative party. The shadow Chancellor mentions the IFS. Paul Johnson from the IFS has just said that it appears that these overspends are genuinely unfunded—words not from me, but from the independent IFS, which the shadow Chancellor referenced. The shadow Chancellor mentions what happened to the reserve. Well, the reserve has been spent, shadow Chancellor. It was spent by you three times over. That is why we are in a position of a £22 billion in-year gap between spending that was happening and the funding to produce it. If the shadow Chancellor could do all the things he spoke about today, why were they not in the forecasts? If he was able, as he says, to make those in-year changes on welfare and productivity, they would have been in the forecasts. They were not. On the issue of the pay review bodies, the previous Government set the remit for those but they refused to give them any indication of affordability. That is almost unprecedented. The teachers reported before the election and that recommendation sat on the former Education Secretary’s desk. Today, we are drawing a line on the industrial action: the £1.7 billion cost to the NHS alone last year and 1.4 million cancelled appointments. We are incorporating a third of those pay increases into efficiencies in our public services, as the shadow Chancellor suggested we should. When it comes to tax, I am not going to take any lessons from the Conservative party. The Conservative party took the tax burden to the highest level in 70 years. The response of the shadow Chancellor just confirms what we already knew: the previous Government were deluded, out of touch and grossly irresponsible. Today, we begin to fix the mess that they have created.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  There is nothing pro-growth about making commitments that we cannot afford. There is nothing pro-growth about having £22 billion of unfunded commitments. We saw that when Liz Truss did her mini-Budget less than two years ago, and right hon. and hon. Opposition Members would do well to learn that lesson.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  There is nothing pro-growth about making unfunded spending commitments. There is nothing pro-growth about a lack of respect for taxpayers’ money. We will continue to provide the winter fuel payment for the poorest pensioners, those in receipt of pension credit.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  I can see, on behalf of the hon. Gentleman’s constituents, the frustration and anger that he feels at the previous Government letting his constituents down so badly by not funding the hospitals that they promised. I commit to my right hon. Friend the Health Secretary meeting everybody affected. We also have a workforce plan, to invest in the future workforce in our national health service, and we are announcing today that we are accepting in full the recommendations of the independent pay review bodies to pay properly our doctors, nurses and others who work in our NHS.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  When I arrived at the Treasury three weeks ago, I asked Treasury officials to do a full analysis. We concluded that analysis over the weekend and I am publishing it today for the House of Commons.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  I thank my hon. Friend for that question and welcome him to his place in this House—he speaks powerfully, based on his previous experience. I will fix the mess that we have inherited, but it is a terrible mess: a £22 billion in-year gap between what was forecast to be spent and what was actually being spent by the previous Government. We will get a grip on our public finances; that requires tough choices, but that is the role of Chancellor, and it is the role of Government. These are choices that the previous Government ducked and diverted, but we will make the difficult decisions to get our public finances back on a firmer footing.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  I thank my hon. Friend for that question. It is to the previous Government’s huge shame that they spent billions of pounds of taxpayers’ money on VIP-lane contracts, and on PPE that was never used; in some cases, it has literally gone up in smoke and been burned. We are appointing a covid corruption commissioner because that money belongs not in the pockets of Tory donors, but in our public services, and we will do everything within our power to get their money back.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  My right hon. Friend the Work and Pensions Secretary is considering that report as we speak.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  I thank my hon. Friend for raising this issue. I will ask my right hon. Friend the Transport Secretary to meet him and discuss it further.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  The challenge of productivity sits across both the public and private sectors. In the last 14 years, productivity has flatlined in the public and private sectors and we need to boost both. We need to boost productivity in the public sector to ensure that we get better value for money for our public services, but we also need to improve productivity in our private sector so that we can improve living standards and have the money for our public services.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  I thank the hon. Gentleman for his questions, and for persevering for so long. I fully agree that the focus should be on frontline public services. We have committed ourselves to back-office efficiency savings of 2% in all Government Departments, and a reining in of consultancy and Government communications spending. Those things got out of hand under the last Government, and we will rein them in. May I end by saying this? We have been here for two hours, and in that time not a single Conservative Member on either the Front Bench or the Back Benches has apologised for the state of the public finances and the state of our public services. That says all we need to know about the outgoing Conservative Government, and they should never have their hands on power again.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  The previous Government and the previous Chancellor should hang their heads in shame for the inheritance they have left for this Government to fix, but I will fix this mess: I will put our public finances and our public spending on a firmer footing. That is the responsible thing to do, and that is what I will do.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  The problem that the previous Government got into was that every time they wanted to make a commitment, they said it would be paid for from the reserve. By the time I came into the Treasury on 5 July, that reserve had been spent three times over, because they put so many commitments into that reserve that they could not afford. That is the situation that we inherited, that is where the £22 billion black hole comes from, and that is why I am having to make difficult decisions today to get a grip on the public finances.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  My right hon. Friend the Chief Secretary to the Treasury briefed the Scottish Government today on these decisions. These decisions are necessary: it is not in the interests of the Scottish people to have unfunded commitments, and to put our public finances and reputation for economic stability at risk. These are not easy decisions—they are difficult decisions—but the fault for them lies with the previous Government. The hon. Gentleman claims that what I have announced today is austerity, when we have just given a pay rise to more than 2 million public sector workers—he does not know what he is talking about.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  I think the hon. Lady for that question. There are a couple of things we are committed to do. First, pension credit and housing benefit are due to be amalgamated. The previous Government put that back; we will bring that forward. We know that take-up of pension credit will increase when it is merged with housing benefit. That will make an impact in ensuring that people get the money they are entitled to. However, we have also committed, as elderly people’s charities have asked, to central Government working with local government to better identify people who are entitled to pension credit, but are not claiming it today. We want to make sure that everyone who is entitled to pension credit gets it, and with it the associated winter fuel payment.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  Before I begin my statement, my thoughts and prayers are with those affected by the events in Southport, and I am sure that the whole House will join me in paying tribute to our emergency services who are dealing with this ongoing situation. On my first day as Chancellor of the Exchequer, I asked Treasury officials to assess the state of public spending. That work is now complete and I am today presenting it to this House. In this statement, I will do three things. First, I will expose the scale—and the seriousness—of what has been uncovered; second, I will lay out the immediate action that we are taking to deal with the inheritance; and third, I will set out our longer-term plans to fix the foundations of our economy. Let me take each of these points in turn. First, I turn to the inheritance. Before the election, I said that we would face the worst inheritance since the second world war: taxes at a 70-year high, debt through the roof, and an economy only just coming out of recession. I knew all of those things, and during the campaign, I was honest about them and about the difficult choices that they meant. The British people knew them too. That is why they voted for change. But upon my arrival at the Treasury three weeks ago, it became clear that there were things that I did not know— [ Interruption. ]

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  I thank my hon. Friend for that question. Let us just be clear that the pay recommendations today are in line with private sector pay. These are just the pay deals that are received by the majority of workers in the private sector. My hon. Friend is right that we owe a debt of gratitude to our frontline workers, who got us through the pandemic and so many other challenges over the last few years, and they deserve to be paid properly for their work.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  My hon. Friend is welcome on the Government Benches with his expertise. Everything in our manifesto was fully costed and fully funded, including 40,000 additional NHS appointments every single week, which will be funded by cracking down on tax avoidance and ensuring that people who make their home in Britain pay their taxes here. We will finally deal with the terrible situation of non-doms claiming that they do not live in Britain for tax purposes, despite making their home here. Those people should contribute to the public purse; under Labour, they will.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  I thank the hon. Gentleman for that question. I have just set out the non-dom tax loophole closures, and my hon. Friend the Exchequer Secretary has published a written ministerial statement today setting out our manifesto commitments around the energy profits levy, VAT on private schools, and the non-dom changes, which we will consult on and introduce in the Budget. We will not be introducing a wealth tax. We want this to be a great place for investors, and a wealth tax would have the opposite effect.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  I know, particularly around flood defences, that there are many great needs in the York constituency that my hon. Friend represents. These decisions will all be made at the time of the spending review.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  I know how hard our teachers, doctors, nurses, armed forces, police officers and prison guards work to keep us all safe, healthy and educated. They deserve the pay awards that we have announced today. It was the independent pay review bodies that recommended those pay increases. It would be extraordinary not to honour them, and we have done so today.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  I thank my hon. Friend for that question. In the letter that the Office for Budget Responsibility published this afternoon, the Chair said, “I welcome the important actions announced today by HM Treasury to improve the transparency and credibility of their institutional arrangements for forecasting, planning, and controlling DEL.” That is really important. By taking these actions, we will ensure that never again can any Government do what the Conservative party did: cause a £22 billion black hole in our public finances.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  I thank the hon. Lady for her contribution, particularly the theme about helping people into work and fixing our national health service. I totally agree with her about the immense damage that the Tory mini-Budget did, particularly in pushing up mortgage costs for so many of our constituents. The hon. Lady asks about industrial strategy. My right hon. Friend the Business and Trade Secretary will be setting out more details of the modern industrial strategy, which will enable us to work in partnership with business to exploit the big opportunities that the country and the economy have for growth and prosperity in all parts of the UK. The hon. Lady asks about health and social care. She is absolutely right to highlight the huge challenge of the waiting list—it was at 7.6 million when the Conservatives left office. I welcome the deal to get junior doctors back to work, and I am sure the whole country will, because it will mean that people can get operations and treatment when they need. After last year’s industrial action cost our economy £1.7 billion and caused 1.4 million appointments to be missed, the deal will be welcomed by people on NHS waiting lists. Of course, this Government have made a commitment to provide 40,000 additional appointments every single week. That is why we will crack down on tax avoidance and ensure that, finally, non-doms who make their home in Britain pay their fair share of tax here. My right hon. Friend the Health Secretary will meet constituents who are affected by the previous Government’s betrayal on building 40 new hospitals, because we recognise, as the hon. Lady says, the importance of ensuring that all our constituents have the health services they deserve. I could not agree more with her that it should not be working people who pick up the tab for the Conservative party’s failure. That is why I have restated our commitment not to increase taxes on working people—there will be no increases in income tax, national insurance or VAT. That is the commitment on which we campaigned in this election, and I stand by that commitment.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  The hon. Gentleman’s constituents will be rightly angry with the previous Government for making unfunded spending commitments that they knew they could not pay for. My right hon. Friend the Health Secretary will meet all those with affected hospitals—including those affected by RAAC—to ensure that we can as quickly as possible address the challenges that his constituents and so many others now face because of the unfunded promises made by the previous Government.

• 29 Jul 2024 · Public Spending: Inheritance · Hansard source

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  I do not believe that any member of the previous Cabinet could not have been aware of the scale of this cover-up and the scale of the overspending. They should hang their heads in shame. Instead of coming to this Chamber today and issuing platitudes, they should have done the right thing and apologised to the country.