Will Rachel Reeves ever take responsibility?

When Chancellor Rachel Reeves took to the airwaves and the stage at Labour Party Conference yesterday, it was to explain all of the reasons why the economy is in such a terrible state – and lay the ground for yet more of her tax rises.

Seeing as these will likely hit many ConservativeHome readers, you might want to hear her reasons, of which there are myriad.

The first thing to blame is the Tories. In one moment Reeves called the party irrelevant, but in the rest of her speech the Chancellor refers to the Conservatives, Tory or Tories 28 times.

“The most enduring consequences of the Conservatives’ time in office come from their economic failure,” she says. But the Conservatives left government with a fast-improving economy – and they are not responsible for the decisions taken in Reeves’ first budget. There is, of course, consternation to be directed for leaving a 70-year-high tax burden after Covid, but Labour seem to have only taken it as a challenge and sought to raise taxes even further. We are 14 months into a Labour government now, and at the next budget we will have reached 16 months. At that point can Reeves really still say it is the Tories fault?

Another reason why none of this is Reeves’ fault is because of the global economy, stupid. How could we possibly expect to be in a stronger position when, according to the Chancellor, there are “harsh global headwinds”. Except this is just another case of a Labour MP stretching reality. What is the big change? There hasn’t been any: Trump had already been elected promising higher tariffs, the Ukraine war was still going – it is only the consequences of Reeves’ actions. 

The UK is woefully unmatched with our global competitors, so much so that we have the highest borrowing costs of the G7. UK’s borrowing costs under Labour are the worst in the developed world, gilt yields reached the highest level this century, with British bond yields higher than elsewhere

Reeves tried to use her speech to define Labour against Reform over their relationships with businesses: “’Who is standing up for businesses? A Labour Government that is forging closer relationships with our closest trading partners, or a Reform party that wants to talk Britain down and almost cut us off from the rest of the world?”

The answer to her question is neither. The Labour party has put up employers NICs, is pushing through the job-killing employment rights bill and failing to get a grip of welfare spending. Its government is overseeing a step-up in closures of pubs, restaurants, and record farm closures.

Reform meanwhile has a manifesto that doesn’t add up (by the value of tens of billions per year), where large tax cuts are partnered with large spending promises – and a lack of detail.

Kemi Badenoch, with a renewed focus on the economy, took to X (formerly Twitter): “Nobody should be in doubt: the Labour government is about to raise your taxes. Only the Conservatives are committed to living within our means so we can lower tax.” She is far further along the right lines than Reeves’ delusion. If the Conservatives cannot only provide economic prudence but hope for growth, it is a sellable pitch.

Another thing getting in the way of the Chancellor making good decisions is that we have two OBR forecasts per year. She now wants this to drop to just one, despite an obsession with the body during their time in opposition (Reeves back in 2023 wanted to give it ever more independence and a ‘fiscal lock’ to guarantee the OBR publish a forecast to accompany any major decision on tax and spenging). There could be arguments to the value of having just one full budget assessment per year, but her move over OBR forecasts does not come from a position of strength – and her public logic isn’t just flawed, but untrue.

Reeves told Times Radio of the idea of going down from two to one forecast per year: “The IMF have said that … and I agree with their recommendations.” What the IMF has actually referred to is OBR “still producing bi-annual forecasts” is “in line with best practice”.

Why would Reeves not want forecasts to be published? One could only assume because it is bad. “Judge me on my record,” Reeves insisted yesterday – even though she doesn’t seem to want that very record published per the above. If she insists.

The Labour manifesto committed that the Party would “not increase taxes on working people, which is why we will not increase National Insurance, income tax or VAT”. At the CBI after her first budget, she said: “I am not coming back with more borrowing or more taxes.” But yesterday, the Chancellor couldn’t repeat it, and at multiple points simply said: “Our manifesto commitments stand.” So basically she is just ruling out changes, up until the point she does it.

Darren Jones, Chief Secretary to the Prime Minister, said similarly: “The manifesto stands today because decisions haven’t been taken yet.” How reassuring.

What she has outwardly signalled is an increase on gambling taxes, claiming: “I do think there’s a case for gambling firms to pay more… They should pay their fair share of taxes, and we’ll make sure that that happens.” While the Daily Mail splashes this morning with plots to enact a VAT attack on private health, following her class war assault on private school fees. And stealth taxes are inevitable as millions are set to be dragged into higher thresholds.

This Labour government is very keen on their idea of paying a ‘fair share’ unless it is their own colleagues, and as long as it involves squeezing ever more from hard-working people’s pockets. 

The problem is it seems Labour will keep squeezing, and as it continues not to work, it will simply continue to blame other factors. Rachel Reeves’ doom-loop will only go on.