Britain’s main opposition party, Labour, has unveiled its plans for economic recovery if it wins the 2024 General Election. In a speech delivered in Liverpool, Shadow Finance Minister Rachel Reeves outlined a series of economic pledges aimed at stimulating growth and rebuilding the country. The party has positioned itself as a centrist, pro-business alternative to the ruling Conservatives.
Reeves emphasized the importance of business investment in fueling economic growth, stating that “you cannot tax and spend your way to economic production.” She highlighted the need for investment to allow businesses to expand, create jobs, and compete with international rivals. Reeves expressed her desire for new plants, factories, and research labs to come to Britain rather than other countries like France, Germany, or the United States.
To ensure responsible fiscal management, Labour plans to implement an ironclad Charter for Budget Responsibility. This charter would require any significant changes to tax policy to be accompanied by an independent forecast from the Office for Budget Responsibility. This move appears to be a direct criticism of former Prime Minister Liz Truss, whose unfunded tax cuts last year sent markets into turmoil and led to her resignation after just six weeks in the job. Truss and then-Chancellor Kwasi Kwarteng had chosen not to seek an independent appraisal, breaking with established norms of economic policy.
Prime Minister Rishi Sunak is facing pressure from some members of his own party to cut taxes, as Britain’s tax burden currently sits at a 70-year high. However, Labour’s strong lead in the polls suggests that the ruling Conservatives have been significantly damaged by a series of scandals and the fallout from Truss’s mini-budget.
Reeves also announced that a Labour government would establish a Covid Corruption Commission to investigate and recover taxpayer funds lost to fraud through pandemic support programs. Additionally, the party intends to crack down on ministers’ use of private jets, taking a direct swipe at the current prime minister.
In an effort to encourage and de-risk business investment, Labour plans to create a new national wealth fund. This fund aims to provide a catalyst for investment while minimizing the associated risks.
Labour’s economic pledges and commitment to responsible fiscal management are likely to resonate with voters, particularly as the country seeks to recover from the economic impact of the pandemic. With the party enjoying a significant lead in the polls, it remains to be seen how the ruling Conservatives will respond and whether they can regain public trust regarding economic policies.
More detail via CNBC here… ( Image via CNBC )