Jeremy Hunt has warned Labour against making “catastrophic mistakes” in the Budget and hiking up “tax in a way that destroys growth”.
The shadow Chancellor issued a stark warning to the government as he spoke at the annual Conservative Party conference in Birmingham.
Asked at an in-conversation event on Monday, if things could get worse, he told Tory peer Daniel Finkelstein: “Well, they will get worse if Labour makes catastrophic mistakes in the budget and hikes up tax in a way that destroys growth.”
Hunt added: “My worry is that Labour believes its own propaganda and starts taking a whole series of decisions, particularly on things like capital gains tax, which have a massive impact in deterring the investment in the economy that we really need.”
The former Chancellor argued that since winning the election, Sir Keir Starmer’s government continued to claim they inherited the worst economy since the Second World War – which he dubbed “nonsense” and “one of the biggest lies we’ve had since Labour came to office”.
“I note that not a single independent economist has been prepared to come forward and back up Rachel Reeves in that claim. And the reason is is very straightforward.”
Hunt insisted the Conservatives had left the economy with inflation at two per cent, and that a succession of Tory administrations over the past 14 years had “created 800 jobs for every single day that they were in office”.
And he added: “We weren’t just the fastest growth in the G7 when Labour took over, but the International Monetary Fund (IMF) said that over the next six years, we are projected to grow faster than France, Germany, Italy or Japan.
“That is a legacy, frankly, that I would have died to have when I became Chancellor. I think the economy’s got very solid foundations.”
His comments came as it emerged today that growth across the UK economy was weaker than previously thought over the spring, according to revised official figures.
The Office for National Statistics (ONS) said gross domestic product (GDP) increased by 0.5 per cent between April and June, revised down from an initial estimate of 0.6 per cent.
It was driven by an increase in the services sector, while the manufacturing and construction industries dragged on the headline figure, the ONS said, indicating that the UK continues to recover from its recession late last year, at a slightly slower pace than previously thought.
Chancellor Rachel Reeves said she was “under no illusion about the scale of the challenge” the country faces, and that “change will not happen overnight”.
“Two quarters of positive economic growth does not make up for 14 years of stagnation,” she added.
But Hunt insisted the figures “once again discredit Labour’s fabricated narrative on the economy” and urged Reeves not to use the Budget to “further damage business confidence”.