Badenoch blames Labour for growth falling in April, and accuses it of waging ‘war on private sector’
Kemi Badenoch was on the Today programme earlier, and she insisted that the government was to blame for growth falling in April. She said:
We have to start from the news that we had this morning – that the economy is shrinking, and it’s shrinking because of choices that the government has made. That is causing a problem that needs to be fixed.
The first budget went after businesses, who are the ones who create growth. They went after jobs with the NI [national insurance] rises, and now we’re seeing that businesses are closing. Unemployment has risen pretty much every month since Labour came in. And that means that we have fewer people paying taxes and more people on the state. That needs to be fixed.
She also accused the governemnt of waging “a war on the private sector”.
But she would not say whether the Conservatives would reverse the rise in employer national insurance that is one of the main Labour policies criticised by business.
Key events
Reeves rules out disability benefit cuts U-turn but says rules may be tweaked
Here is Eleni Courea’s story on Rachel Reeves ruling out a U-turn on the cuts to sickness and disability benefits.
Badenoch says size of state should be smaller, arguing it ‘can’t do everything’
Kemi Badenoch has also written an article for the Times saying she wants to see the size of the state reduced. She says:
Cutting spending isn’t about austerity. It’s about smarter government. A state that does fewer things — but does them properly. One that protects borders, enforces the rules, defends property rights, and creates a climate where business can thrive.
As a country we’ve lost the courage to say the obvious: that government can’t do everything. That the state can’t fix every problem. And that when we punish the people who create growth — the business owners, investors, entrepreneurs — the whole country loses.
In her Today programme, Emma Barnett, the presenter, quoted this article, and asked Barnett what she meant when she said there were lots of problems the government could not fix. Badenoch replied:
There is a lot that government does that has nothing to do with public services.
We have endless quangos. We have endless sort of busybody work inspections. We can cut down on things like planning. There’s a lot that the government says they want to do in terms of getting housebuilding going. I want us to see what we can do in terms of deregulation.
But, when Barnett asked her to give specific examples of what she would cut, Badenoch said she would not set that out now because the election was a long way away.
Badenoch blames Labour for growth falling in April, and accuses it of waging ‘war on private sector’
Kemi Badenoch was on the Today programme earlier, and she insisted that the government was to blame for growth falling in April. She said:
We have to start from the news that we had this morning – that the economy is shrinking, and it’s shrinking because of choices that the government has made. That is causing a problem that needs to be fixed.
The first budget went after businesses, who are the ones who create growth. They went after jobs with the NI [national insurance] rises, and now we’re seeing that businesses are closing. Unemployment has risen pretty much every month since Labour came in. And that means that we have fewer people paying taxes and more people on the state. That needs to be fixed.
She also accused the governemnt of waging “a war on the private sector”.
But she would not say whether the Conservatives would reverse the rise in employer national insurance that is one of the main Labour policies criticised by business.
UK turning into ‘national health state’ because NHS will take half of day-to-day spending by 2029, thinktank says
The Resolution Foundation is holding a briefing about its spending review analysis. There is a live feed here.
Here is a summary of the analysis.
And here are the main points.
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Britain is morphing into a “national health state”, because health will take up half of day-to-day public spending by the end of the decade, the thinktank says.
Yesterday’s NHS-dominated settlement continues a pattern of recent Spending Reviews, which has led to a major reshaping of the state. By the end of the decade (2028-29), the health service will account for half (49 per cent) of all day-to-day public service spending controlled by Westminster – up from a third (34 per cent) in 2009-10.
While real, per-person funding for health has increased by 36 per cent between 2009-10 and 2028-29, it has fallen by 16 per cent for Justice, 31 per cent for Work and Pensions, and 50 per cent for Housing, Communities and Local Government over the same period.
And Ruth Curtice, chief executive of the thinktank, said:
Health accounted for 90 per cent of the extra public service spending, continuing a trend that is seeing the British state morph into a National Health State, with half of public service spending set to be on health by the end of the decade.
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The 2020s will see day-to-day public spending rising by much more than in the 2010s, but by much less than in the 2000s, the thinktank says.
Real day-to-day spending is now rising again in the 2020s (2019-20 to 2028-29) by 2.2 per cent a year, following a 0.5 per cent fall per year in the 2010s (2009-10 to 2019-20). In the decade prior to that, spending rose by 4.3 on average each year (2001-02 to 2009-10).
The extra funding for hospitals, schools and the police relative to plans set out by the previous government will deliver important benefits-in-kind to families. The foundation estimates that a middle-income household will gain £1,400 on average for extra public service provision (in 2028-29), rising to £1,7000 for the poorest fifth of families.
This is why the Treasury was able to publish figures yesterday suggesting that, overall, its record on tax, benefits and public spending has been highly progressive.
The large increase in public spending has been funded in large part by the £39.7 billion of tax rises (in 2028-29) announced in the Budget last Autumn and £3.6 billion of benefit cuts (in 2028-29) announced in the Spring Statement – equivalent to £1,550 for every family in Britain. But the combination of a weaker economic outlook, an unfunded spending commitment on winter fuel payments, and just £9.9 billion of headroom against the chancellor’s fiscal rules, mean further tax rises are likely to be needed this autumn.
Q: Will there be fewer civil servants as a result of your plans?
Yes, says Reeves. She says one example is the government’s decision to scrap NHS England.
Q: You guarantee that the extra police promised by Labour in its manifesto will be funded?
Reeves say she gave that commitment in her speech yesterday.
Q: Are you assuming councils will increase council tax by the maximum 5% each year. That would be a £7.5bn tax rise.
Reeves claims her plans are not based on the assumption that every council will raise council tax by the maximum allowed every year.
Abel asks about the winter fuel payments U-turn cost, and gets the same reply ITV’s Good Morning Britain did. (See 8.40am.)
It’s Times Radio next for Rachel Reeves. She is being interviewed by Stig Abell and Kate McCann.
Abel starts off with the GDP figures, and Reeves repeats points she has made earlier, saying monthly figures are volatile, and the three-month figure much better.
Q: What does stabilising the economy mean?
Reeves says the Bank of England has been able to cut interest rates four times. But she recognises conditions are still tough for people, she says.
Q: Where will asylum seekers be living when you get them out of hotels?
Reeves says: “We need to deport more of them.”
She claims this is happening.
Q: But you are still budgeting for costs of £2.5bn. What are those for?
Reeves says hotel accommodation is the most expensive form of accommodation. That is why the government is getting rid of them.
Q: It will be a record year for cross-Channel crossings?
That is why we are putting more money into Border Force.
Abell repeats the question about where people will go. Do you know?
Reeves says that is a matter for the Home Office.
Q: Is it possible you may have to raise taxes more?
Reeves says Labour committed in the manifesto not to raise the key taxes working people pay, income tax, national insurance, and VAT. She has kept to that and will stick to that, she says.
And that’s the end of the ITV Good Morning Britain interview.
Reeves says being chancellor is not about ‘trying to win popularity contest’
Q: Do you accept that you are in a weaker position as chancellor than when you started?
Reeves says she does not view the job as “trying to win a popularity contest”.
Reeves brushes off questions about how winter fuel payments U-turn will be funded, saying fresh OBR forecast coming first
Q: What taxes will have to go up?
Reeves says her spending plans are funded.
Q: But the winter fuel payments U-turns was not funded. So currently your sums do not add up.
Reeves says this will be paid out in the winter. There are another OBR forecast to come before then, she says.
Q: You claim all your spending plans are funded. But every economist says taxes are going to have to go up. Are you saying that won’t be necessary.
Reeves repeats her point about no chancellor being willing to set budgets for years ahead.
