Rachel Reeves has been challenged over claims the government has “generated a fear and foreboding” among consumers – but insisted she was “optimistic” about the economy.
Ahead of her keynote speech to the Labour Party conference in Liverpool today, the Chancellor was challenged on Sky News over last week’s fall in consumer confidence to the lowest level since January.
Former Bank of England chief economist Andy Haldane told the broadcaster last week “the government had generated a fear and foreboding and uncertainty among consumers and businesses” and Reeves was asked: “Do you take some responsibility for the short term?”
She argued after becoming Chancellor, she “came to learn of the true inheritance that the previous Conservative government left us a £22bn pound black hole in the public finances.
“The Conservatives covered that up from Parliament, and they covered it up from the country. Now I had a choice. I could have covered it up too, and said, ‘actually, that’s bad news. We don’t want to get that out because we want to boost confidence’.
“Or I could have been honest and transparent and open about the scale of the challenge – that the road ahead is harder and steeper than we anticipated, and I made the choice to be open and honest because I think it’s really important that we level with people.”
Reeves, who is set to announce the appointment of a Covid corruption commissioner in her speech later today, to help reclaim public money from pandemic-era contracts that did not deliver value for money, aimed to strike a more optimistic note during media appearances.
“What is really important is we set out a plan to fix the mess that we’ve inherited from the last government, and that’s what I’ll be setting out in my conference speech today,” she stressed.
“Yes, the difficult decisions, the hard choices, but also the prize on offer if we can return that stability and reform our economy. I’ve never been so optimistic about our country’s future.
“If we can get this right, then there is no end to what we can achieve as a country, and that’s what I’m determined to do, to unlock the real potential that we have, through stability, through reform.
“And then, crucially, through investment, which is the solution to the low growth that has bedevilled our economy this last decade or so.”
Speaking to Times Radio, Reeves also defended her decision to means-test winter fuel payments to pensioners, highlighting her commitment to “keeping the triple lock… for the whole of this parliament” and encouraging eligible OAPs to apply for pension credit.
She also insisted “there’s not going to be austerity under Labour” but declined to rule out cuts to public spending.