Britain’s governing Labour party on Monday sought to strike a more upbeat note about the country’s economic future against a furious backlash at proposed cuts to welfare payments and a row over top ministers receiving gifts.
In a keynote speech to the centre-left party’s annual conference in Liverpool, interrupted by hecklers, finance minister Rachel Reeves reiterated the need for “iron discipline” on the economy amid ballooning state debt.
Britain’s first woman chancellor of the exchequer said her first budget next month would open the way for business investment that would hand the country “lasting growth”.
She repeated Labour’s pre-election pledge that workers would not face tax rises on salaries, paving the way, however, for increases on other levies, according to analysts.
She also pledged “no return to austerity” as seen under Conservative rule. The government last week agreed bumper pay rises for doctors and train drivers but as Reeves neared the end of her speech, news came through that nurses had rejected an improved pay deal.
“We must deal with the Tory legacy and that means tough decisions but I won’t let that dim our ambition for Britain,” Reeves told a packed hall as she looked ahead to next month’s budget announcement.
She said her tax and spend plans will show “real ambition… a budget to rebuild Britain”.
Reeves also confirmed the appointment of a new Covid corruption commissioner to try to claw back billions of pounds in taxpayers’ money wasted on contracts during the global health emergency.
But as the chancellor and other ministers try to prevent a row over “freebies” from escalating, Britain’s economy is failing to deliver, with recent official data showing UK government debt at the highest level in more than 60 years.
At the same time, the nation’s economic growth has stalled and its annual inflation rate remains above the Bank of England’s target, slowing a path to cuts in interest rates that would likely boost consumer spending.
The conference should have been an opportunity for Labour to toast its landslide July general election victory over the Conservatives after 14 years out of power.
But in recent days been Prime Minister Keir Starmer and his top team have been forced to fend off accusations of hypocrisy for accepting expensive gifts at the same time as asking ordinary people to tighten their belts.
All of the gifts have been declared and none falls foul of the parliamentary rules.
But the record shows that Starmer accepted more than £100,000 ($132,000) in gifts and hospitality since December 2019 — more than any other lawmaker.
It also emerged that Deputy Prime Minister Angela Rayner accepted the loan of a New York apartment for a holiday.
Since Friday it has also emerged that Reeves, who has angered trade unions and her fellow Labour MPs by announcing plans to axe a winter fuel payment for many pensioners, accepted some £7,500 in clothing.
Reeves has defended the abolition of the £300 payment to 10 million pensioners to help them heat their homes, owing to what Labour says is a “£22 billion black hole” left by the Conservatives.
Motions have been proposed at the conference calling for the cut to be abandoned. Sharon Graham, general-secretary of the Unite trade union, called it “cruel” and urged a U-turn.
Trade minister Douglas Alexander conceded stories about free gifts were “not the headlines we would have chosen” for its first party conference since winning power.