Labour vows no return to austerity amid donation controversy

Rachel Reeves will assert that a Labour government will not return to austerity, amidst ongoing controversy over donations. During the party’s conference in Liverpool later in the day, the chancellor will outline her first budget, set for 30 October, aimed at “rebuilding Britain” in line with the electoral mandate that gave Labour its first victory since 2005.

Her speech will occur in the context of the ongoing scandal regarding donations accepted by the prime minister and cabinet ministers, and amid critical briefings about Sir Keir Starmer’s chief of staff, Sue Gray.

The government faces criticism for projecting a bleak outlook and warning of a “painful” budget while accepting significant donations from wealthy individuals. Earlier this week, Sir Keir announced that he, Ms Reeves, and Deputy Prime Minister Angela Rayner would no longer accept donations for personal expenses like clothing.

‘I don’t think this is going to go away any time soon…’@NatashaC believes Keir Starmer promising to no longer accept clothes donations won’t stifle the criticism, telling @RachelSJohnson it will ‘dominate’ the Labour Party conference. pic.twitter.com/U8Th9svZZN

— LBC (@LBC) September 20, 2024

Ms Reeves is expected to declare: “There will be no return to austerity. Conservative austerity was a destructive choice for our public services and for investment and growth. We must deal with the Tory legacy, which means making tough decisions. But we won’t let that dim our ambition for Britain. This will be a budget with real ambition, aimed at fixing the foundations and delivering the promised change. A budget to rebuild Britain.”

The chancellor, who advocates for growth as the solution to the UK’s economic issues, is also expected to indicate further public investment to support this goal. She has defended making difficult decisions, such as removing the winter fuel payment from most pensioners, arguing that economic growth will follow once stability is achieved. She has also claimed that her predecessors left a £22bn deficit in public finances, which Labour must address.

Throughout the general election campaign, Labour committed not to increase major taxes—national insurance, income tax, and VAT—a promise Ms Reeves will reiterate today. She will also state that corporation tax will remain at its current level for the duration of this parliament.

“Keir Starmer has defended his gift taking insisting that it is transparency that matters”
S we can all do exactly as we like, morally right or wrong, as long as we are “transparent” about it?
Interesting…https://t.co/iBYEYHwyr6

— Anne Greensmith 💙 (@snowleopardess) September 22, 2024

Shadow chancellor Jeremy Hunt challenged Labour’s claims about the Conservatives’ economic legacy, accusing Ms Reeves of harming the UK’s international reputation for political gain. “If she believes in growth, where is the plan? People are beginning to suspect there may not be one,” he said, warning that tax rises and employment laws could hinder investment and job creation.

Labour’s leadership faces a conference battle over its decision to cut winter fuel payments for 10 million pensioners, with trade unions pushing for a policy reversal. Union sources indicated that the issue would be debated on the conference floor after Ms Reeves’ speech, although a vote might be delayed until later in the week. Unite has already displayed billboards in Liverpool with the slogan “Defend the winter fuel payment” and plans a demonstration outside the conference centre.