Labour: We must pass fiscal credibility test
Shadow Treasury chief secretary Rachel Reeves will use a speech today to try and reinforce Labour’s attempts at creating a fiscally responsible image and attack the Government’s economic record.
In her first major speech as a Shadow Treasury minister, Reeves will tell the Institute for Public Policy Research the Government is failing to meet its own economic goals and wasting money on “questionable spending” and “pet projects”. She will add that Labour must “pass the test of fiscal credibility” to have a chance at the next election.
She will say: ““The Government said it would cut borrowing, but it is borrowing £158bn more than planned. The Chancellor said he would balance the books by the end of this Parliament, now he has had to admit he will not. The Government said it would live or die by the judgements of the credit ratings agencies, but even they are now sounding the alarm bell.”
She will reiterate Labour’s calls for a cut in VAT, a national insurance holiday for small firms taking on staff and a repeat of the bank bonus tax to fund a youth employment programme to “get the recovery back on track”.
She will attack the “questionable spending” of £69,000 by the Ministry of Defence in music and piano stores and of £900 by the Ministry of Justice on cosmetics. She will also slam the “incredible sums” ploughed into “pet policies” such as the restructuring of the NHS.
A Labour review of departmental spending is intended to identify how it would continue deficit reduction should it win the next election. Shadow Chancellor Ed Balls has been trying to paint Labour as more fiscally responsible, admitting many Coalition cuts would be kept if Labour was in power.
Reeves will continue the theme today. She will say: “It is precisely because we on the centre left believe in the power of public services and active Government to transform lives, and make our country fairer and more prosperous, that we must ensure we pass the test of fiscal credibility. Earning people’s trust to be responsible custodians of public money is the precondition for gaining the right to be heard on any other issue.”