Get 40% Off
👀 👁 🧿 All eyes on Biogen, up +4,56% after posting earnings. Our AI picked it in March 2024.
Which stocks will surge next?
Unlock AI-picked Stocks

Targetting government, UK's Labour pledges sound finances and strong public services

Published 25/09/2022, 22:33
Updated 26/09/2022, 17:08
© Reuters. FILE PHOTO: Shadow Chancellor of the Exchequer Rachel Reeves is interviewed outside the BBC in London, Britain, October 24, 2021. REUTERS/Peter Nicholls/File Photo

By Elizabeth Piper and Andrew MacAskill

LIVERPOOL, England (Reuters) -Britain's opposition Labour Party set out its economic vision on Monday, promising, if in power, to be fiscally responsible and take care of public services, in a swipe at the Conservative government's tax cuts for the wealthy.

At their annual conference, Labour lawmakers are sensing a change in their fortunes after a punishing loss at a 2019 election, feeling they can now offer a real choice to voters after the government announced a "growth plan" that handed tax cuts mostly to big business and the wealthiest.

Friday's so-called mini-budget has opened up a divide between Prime Minister Liz Truss's Conservatives and the Labour Party of Keir Starmer, who wants to use the years before an expected election in 2024 to prove his team is ready for power.

Rachel Reeves, Labour's finance policy chief, told the conference in the northern English city of Liverpool the party wanted to spur growth by focusing on green projects, but would do so without sacrificing workers by raising the minimum wage.

"Know that these are Labour’s priorities. Strong public services, to support people, and grow our economy," Reeves told the conference to sustained applause.

"It's time for a government that is on your side. That government is a Labour government, and be in no doubt, that government is on its way."

She again took aim at the "Growth Plan" presented by finance minister Kwasi Kwarteng on Friday, accusing him of prioritising the wealthy over working people struggling with rising prices by turning to the discredited theory of "trickle-down economics".

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

"A return to a trickle-down idea that has been tried, has been tested, and has failed," she said, again comparing Truss and Kwarteng as "two desperate gamblers in a casino, chasing a losing run".

The government says deregulation and tax cuts will lift Britain's rate of economic growth over the longer term.

Reeves also pledged to "build British industry" by using a national wealth fund similar to funds in Norway and Singapore, with an initial 8 billion pounds ($8.6 billion) earmarked for green projects, and to set a new minimum wage.

Labour is hoping to fill the gap left by the Conservative government, which has shifted to the right with its economic plan and also lost the confidence of the markets, with the pound plunging to a record low against the dollar.

Kwarteng scrapped the country's top rate of income tax and cancelled a planned rise in corporate taxes, all on top of a hugely expensive plan to subsidise energy bills for households and businesses, with little detail of how it would be paid for in the short term beyond increasing government debt.

On Sunday, Starmer pledged to reverse the abolition of the top rate of income tax and restore it to 45%, saying tax cuts for the wealthy would not spur growth.

Reeves said the plan was not what people voted for after Truss was appointed as prime minister by the Conservative Party rather than the public following her predecessor Boris Johnson's resignation.

"It's putting our economy in danger," she said. "And Labour will fight it every step of the way."

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

($1 = 0.9263 pounds)

Latest comments

National wealth fund will only fund ‘big business’ too … these things depend so much on how ‘you’, the media present them … everyone got a tax cut, many in fact … but the headlines suggest those with highest incomes (and highest expenses by the way) are the main beneficiaries… try a balanced representation by quantifying the ‘cost’ of these tax cuts… how much in total is it benefiting the segments of the population that you like to identify so much
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.