'Impossible trade-offs' if no UK economic growth – Reeves

'impossible-trade-offs'-if-no-uk-economic-growth-–-reeves
'Impossible trade-offs' if no UK economic growth – Reeves

Labour’s Shadow Chancellor, Rachel Reeves, has stated that if the UK’s economy fails to grow, a Labour government would have to make “almost impossible trade-offs” on tax and spending. Ms Reeves emphasized that the only method to increase cash for public services would be to expand the economy. She made these comments just ahead of a major speech to business and finance leaders, in which she pledged that Labour would aim to bring about a “new chapter in Britain’s economic history”.

In her speech at the annual Mais Lecture in London, Ms Reeves promised that Labour would reform the Treasury as part of the party’s economic policy. She suggested that the Treasury had not been adequately focused on growing the economy in its tax and spending policy. She proposed bringing back a unit focusing on growth and high productivity to feed into critical decision-making for spending reviews and Budgets. She also confirmed details about Labour’s approach to controls on borrowing, interest rates set by the Bank of England, and how it would return the economy to long-term growth.

Ms Reeves hopes to encourage business investment and long-term growth, with significant changes to planning and industrial policy enticing private companies across all sectors. Although some of the policies described by Ms Reeves reflect those pursued in the White House as part of Bidenomics, she seeks to attain the same green growth without significant borrowing. However, there were no new tax and spending policies announced in the speech.

The Mais lecture is a high-status event that provides an audience of City financiers and economists with the chance to hear chancellors, shadow chancellors, and Bank governors outline their principles for running the economy. The Conservatives have claimed that Labour has “no plan – just more borrowing and more taxes,” while Unite union general secretary Sharon Graham mentioned that Labour’s focus should be on delivering good jobs, public services, and dignity rather than abstract economic concepts

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