The chancellor’s politically tone-deaf opinion piece in the Independent was classic Rachel Reeves: oblivious, managerial, and far too pleased with herself. The language was the usual bureaucratic mush preferred by junior civil servants.
While the tone was bad, the biggest problem was her inability to accept responsibility for the cost of living crisis she has created.
Reeves would have you believe the most pressing issues with the economy – namely higher taxes, low business confidence and zero growth – have been caused by “global turbulence”. Not a chance. This was self-inflicted and she needs to own her mistakes.
While the chancellor talks about protecting consumers from “price gouging”, the truth is the only price gouger is the chancellor. Motorists are already paying heavily in tax at the pump. Yet Reeves is planning the first hike in fuel duty hike for 15 years.
The Treasury already takes 55 per cent of the price of petrol when they fill up. Ms Reeves will be collecting plenty of extra VAT from motorists as the market price of the underlying oil price rises. This threat of further increases hangs over families and businesses alike. It is a curious definition of “tackling the cost of living” that starts with taking more in the first place.
It doesn’t stop at petrol. In her bid to fund yet more welfare, the chancellor has allowed local authorities to push up council taxes by 5 per cent, and in some particularly rural councils, left them so short of money she’s encouraging inflation-busting rises.
Reeves has jacked up the cost of government borrowing by her failure to control welfare, which is now leading to costlier mortgages. The chancellor who has put taxes on jobs, on farms and on small businesses has forced them to put up prices or to make unsustainable losses. She is the queen of industrial closures, the director of more imports, and chief job losses creator as her high taxes, crazy bans and new onerous regulations push up both prices and unemployment.
It’s in our energy bills that we really see the “Reeves Effect”. Instead of using the oil and gas resources we have, we are becoming more dependent on imports, leaving households exposed to global shocks while being told those same shocks are the whole story. Instead of scrapping the green taxes, she’s simply moving some levies from energy bills on to general taxation. Families will still be paying more, it’ll just be harder to see.
The answer to the global energy crisis is our cheap power plan: stop the fuel duty hike, scrap the green taxes that are pushing up bills and start drilling again in the North Sea. That would mean more of the energy we need comes from Britain rather than from abroad, giving us greater security of supply, more tax revenue, and less exposure to the global shocks Labour says it can do nothing about. That is how you cut costs properly: not by shifting levies around or handing out subsidies, but by producing more of our own energy and making Britain less dependent.
The bottom line is that our economy is weaker, more exposed to shocks and now has one of the highest inflation rates in the G7 because Reeves increased the tax burden on businesses at precisely the moment the economy needed confidence and investment. That cost does not sit solely on business – it is passed on through higher prices, fewer jobs, and slower wage growth. That is why we are seeing businesses closing their doors on high streets across the country.
Unemployment has risen every month since Labour came to office. At the same time, borrowing and spending have risen without the growth to support them. The result is predictable. Inflation remains stubborn, debt interest is climbing, and the cost of government is eating into the very resources that should be strengthening the economy. This is not “global turbulence” but bad policy choices.
All of that feeds through into household budgets, yet Reeves wants us to be grateful, asking for credit for failing to put out the raging fire she started. These are not the unavoidable consequences of events abroad. They are the consequences of decisions taken here at home.
All political parties make mistakes. The Conservatives paid a heavy price at the ballot box for our errors in government, which we acknowledge and have apologised for and are working hard to win the public’s trust again. We are now building a proper plan for a stronger economy and a country.
Starmer and Reeves have no such plan. They have managed to make everything worse in such a short space of time. Rather than self-congratulation, a little humility on Rachel Reeves’s part would go a long way.
Kemi Badenoch is the leader of the Conservative Party
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