Rachel Reeves is right: this government is gaslighting us over the economy

The shadow home secretary, Yvette Cooper, shadow chancellor, Rachel Reeves, and Labour deputy leader, Angela Rayner, visit a supermarket in Yarm, Teesdale, 10 April 2024. Photograph: Stefan Rousseau/PA

Labour’s tanks roll relentlessly across Tory lawns, not pausing a heartbeat to celebrate phenomenal local election results in England. It treated the local polls as a military rehearsal for the general election, with ruthless focus on places that will deliver most seats: that includes the south, as well as the north and Midlands, and the party is heading for Scottish turf too.

But the mesmerising ferocity of blue-on-blue abuse is the current news-making drama. Fighting bare-knuckle over post-election ideology, the Tory right are looking forward to an election defeat as long as one of their own isn’t at the helm. Besides, they have Sunak in their grip, while the Mail calls Boris Johnson a “coiled mamba” waiting “to save the Tories from total annihilation”. Mournful one-nationers echo the losing West Midlands mayor Andy Street’s dignified call for moderation, unheeded. Sunak can stay or go: Labour relishes either equally.

Before the winded government finds words that make any sense, Labour is out there pummelling them again. The shadow chancellor, Rachel Reeves, delivers a speech on Tuesday to nip any “green shoots” talk in the bud, ahead of the week when the Bank of England’s monetary policy committee may signal interest rate cuts soon, and ONS figures show a small rise from recession and April’s inflation figures hitting the 2% target.

Reeves is getting in first, pre-empting these results with a torrent of data that may feel far closer to people’s real life experience. “Conservatives are gaslighting the British public,” she says. “They say we’ve turned a corner. But try telling that to the 6.4m households across England and Wales that saw their rent increase or had to re-mortgage in the last 18 months, at an additional £210 a month. Or the 950,000 families whose mortgage deal is due to expire between now and January.” When Sunak says “the plan is working”, she can show the UK is set for the slowest growth in the G7.

This will be the first parliament “where real disposable incomes are going to be lower at the end of it than they were at the beginning”, she says. Had the UK economy grown at the average OECD rate over the past decade, it would be £140bn larger today: “The Tory legacy is a Britain that is poorer.” Her litany of woe points to people worse off, with “economic growth on the floor”, taxes rising, “yet public services in ever deeper crisis”. She lands blow after blow. “By the time of the next election, we can, and should, expect interest rates to be cut, Britain to be out of recession and inflation to have returned to the Bank of England’s target,” she says, listing the last threads that Sunak’s government hangs by.

But Labour focus groups who are shown ministers’ statements on “falling inflation” laugh out loud, with people asking: “Where do they do their shopping?” Told that inflation is falling while they see prices rising “makes them want to throw their butter at the TV”, one Labour aide says. “Except it costs too much.” When Reeves says the Tories are gaslighting voters, that’s exactly what they think, when food prices remain 25% higher than two years ago. No “recovery” will bring them back down. People describe the economy as damaged, broken, tanked, even “a pyramid scheme”, their minds firmly made up, as they were in 1997, when living standards were genuinely improving. Average wages will not return to 2008 levels until 2026, says the Resolution Foundation.

Telling people they should feel better when they only feel tightened belts and empty purses adds to political cynicism, as Reeves tries to counter the “they’re all the same” mindset. Households are slashing spending, even on basics, with grocery spending up 16% but buying 8% less in volume. Less is spent on appliances, hairdressing, travel, restaurants and recreation and less on culture – music venues and theatres attest to that. That squeeze will not be gone by election time.

Reeves keeps asking that old question, “Do you and your family feel better off than you did 14 years ago? Do our hospitals, our schools and our police work better than 14 years ago?” No wonder the Tories strive to shift the battleground to Rwanda, trans issues or any “wokery” they can drum up. And they get it wrong: a YouGov survey has found that 59% think the government is taking too little action on climate change.

Labour discontents might even be cheered by scares that Starmer is a closet Marxist, as the Telegraph’s Camilla Tominey warns Tory defectors not to give “birth to a monster”. Pay no attention to his “banging on about patriotism and the St George flag”, as this “wolf in sheep’s clothing” is “no cuddly Blairite”. But some may remember how the same red scare on “demon eyes” Blair back in 1997 failed miserably.

As for Reeves, her attacks on the wretched state of living standards turn that vital question back on her: will people feel better under Labour? In her Mais lecture in March, Reeves laid out her “securonomics” programme, a smaller-scale Bidenomics to kickstart investment for growth. It relies on 1.5m homes to be built after a planning reform “blitz”. Her national wealth fund seeds investment to boost jobs with a “skills revolution” and a “genuine living wage”. Her green prosperity plan still offers £28bn by the second half of the next parliament, and an increase to the windfall tax on oil and gas.

But none of that can quite answer the question. Extreme caution has gained Labour rare public trust on the economy: without that there’s no chance of victory. What Reeves does in office is another matter and Labour will need to be bolder than she can say now. That’s asking the impatient to take it on trust that she can conjure up enough growth to repair public services and restore incomes. But winning always has to come first.

Polly Toynbee is a Guardian columnist