Labour’s election plan to stop Sunak benefiting from economic recovery
Labour is set to put the economy at the centre of its general election campaign in an attempt to move on from the Jeremy Corbyn era and stop the Conservatives benefiting from higher growth and lower inflation.
New statistics out this week are expected to show that the UK is no longer in recession, while updated inflation data later in the month could demonstrate that the rate of price rises has returned to its target level.
And while the Bank of England is not expected to reduce interest rates when it makes its latest decision on Thursday, they are expected to be cut in time for the General Election, likely to be in October or November.
Rishi Sunak and Jeremy Hunt will use the developments to argue that the Conservatives have put the British economy back on a positive path following the cost-of-living crisis.
But in a speech yesterday, shadow Chancellor Rachel Reeves argued that ministers were ignoring how ordinary people feel about their finances.
She said: “Instead of believing the Prime Minister’s claims that we’ve turned a corner – the questions people will ask ahead of the next election are simple.
“Do you and yours feel better off than you did 14 years ago? Do our hospitals, our schools and our police work better than 14 years ago? Frankly, is there anything in Britain that works better than when the Conservatives came into office 14 years ago?”
She accused the Tories of being “managers of decline” and pledged to “bring a laser focus to bear on the barriers to economic growth”.
A senior Labour source said the party was planning to continue building its election campaign around the economy.
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The insider told i: “First, it’s still the top issue for voters – just ahead of the NHS. Second, there’s a major policy question which is how the UK can actually get the economy growing again. And third, there’s the political perception that Labour never talks about the economy – we want to change that.”
Polls ahead of the last general election showed that only a small minority of voters trusted then-Labour leader Mr Corbyn with the economy, even though many of his individual taxation and spending policies were popular.
Ms Reeves insisted that despite the focus on economic growth, Labour would also press ahead with a package of stronger employment rights which has been welcomed by trade unions but is opposed by business groups.
She said: “The truth is that many, many businesses already go well beyond what is set out in the ‘new deal for working people’.
“They don’t have zero hour contracts, they’re not using practices of fire and rehire, they give better rights around sick pay for example, and so a business has got nothing to fear from the new deal for working people.
“But businesses who do use these methods, then there will be a level playing field to ensure that businesses can’t undercut each other by using zero hour contracts, for example, or through fire and rehire.”
Speaking in the House of Commons, Mr Hunt defended the Government’s economic record.
He said: “The biggest single thing we can do to help people with cost of living pressures is to bring down inflation, and that seems to be something that escaped the shadow Chancellor this morning when she said it wasn’t a big deal to get inflation down to its target.
“It’s a very, very big deal for families facing a cost of living crisis, and she needs to know that inflation falls by design and not by accident.”
The Chancellor insisted that “someone on the average salary has the lowest effective tax rate since 1975” – but Ms Reeves accused him of endangering the state pension with a pledge to abolish national insurance over time.