Labour have ‘broken promises’ to the public, says Shadow Exchequer Secretary

We’re joined by Shadow Exchequer Secretary Gareth Davies.

Krishnan Guru-Murthy: All these tax rises are your fault, really. I mean, it must be very embarrassing to have the Office for Budget Responsibility effectively say you lot were irresponsible. And the fact that you didn’t tell everybody about your future spending plans meant that there was a material change in how they would have assessed your previous numbers.

Gareth Davies: Yeah, well, you’re right to characterise Rachel Reeves’ comments that it is everybody else’s fault but hers, that she’s had to implement the biggest tax rise on the British people, despite saying she wouldn’t, in history.

Krishnan Guru-Murthy: Public services are in a mess. That’s why you lost the election.

Gareth Davies: But just on the OBR point, I think it’s important we address that. That is not what Richard Hughes has said at the OBR. He said that he doesn’t understand, he doesn’t legitimise the 22 billion black hole figure that Labour have been rolling out. He has been clear on that.

Krishnan Guru-Murthy: He’s talked about over 9 billion and he said it would have made a material difference to their assessment.

Gareth Davies: So that is correct. But he has also said in a letter on Sunday to Jeremy Hunt that this is not about ministers. This is an official to official level communication, and he has to take that up with the Treasury civil servants.

Krishnan Guru-Murthy: But they confirmed that there was a black hole. Now, you can argue about precisely how big it was, but it’s a basic irresponsibility of your government that has meant that taxes now have to go up.

Gareth Davies: No, not at all. And if we’d have been, and I’d love to be standing here as the exchequer secretary still, with a budget today, we would have, of course, covered the money that has been spent this year on various items…

Krishnan Guru-Murthy: You would have cut services..

Gareth Davies: …including by the way the infected blood compensation, which we committed to. So that’s what you do in the budgetary process.

Krishnan Guru-Murthy: Where would the money have come from? You’d have made cuts and public services would have been even worse.

Gareth Davies: That’s speculating on what we would have done, but we would have perhaps have had to make difficult decisions. But let’s be really clear what’s happened today. Rachel Reeves has implemented a £40 billion tax rise on a fictitious $22 billion black hole.

Krishnan Guru-Murthy: Because the country is in a mess. Because you left it in a state. That’s why you lost the election so badly.

Gareth Davies: We did lose the election and we lost the trust of people. But I think Labour have lost the trust today because they ran an election campaign on a series of policies and we don’t have a long enough…

Krishnan Guru-Murthy: It’s a valiant attempt…

Gareth Davies: £300 off energy bills completely dropped. We won’t increase national insurance. Today, a £25 billion hit to national insurance. So I think the British public will look at this dispassionately and look at it and say, hang on a minute, we weren’t told any of this. We voted Labour because you said you wouldn’t raise taxes. You said it was all fully covered.

Krishnan Guru-Murthy: They said they wouldn’t raise national insurance, income tax and VAT on working people and they haven’t. What they have done is raise a tax that will feed through. We’ve made that clear. And I guess voters will make their judgements.

Gareth Davies: They will make their judgement. And I think, look, we’re looking at a one-term Labour government here. I just think that the lack of understanding as to how angry people are with this, when you say on the one hand, we are not going to increase national insurance…

Krishnan Guru-Murthy: Don’t you think you should at least have an understanding of how angry people are with you?

Gareth Davies: We do.

Krishnan Guru-Murthy: But you’re not really showing it, I have to say. I mean, a few months in, your party still doesn’t know who its leader is. It doesn’t know what its policy is. You know, you don’t know whether you’re still the exchequer secretary on Saturday afternoon.

Gareth Davies: Look, you know, this is the process of going through a leadership election. Labour did that when they had Jeremy Corbyn. Remember that guy that they tried to impose on the British public? Of course we are humble in defeat, but our role now, is as the official opposition, to hold this government to account when they have so clearly broken promises to the British people. It is our responsibility in parliament now to hold them to account for the decisions that they have made. The choices she has taken to impose, as I say, the greatest level of tax that we’ve seen for decades and decades, if not in history.

Krishnan Guru-Murthy: Why do you think so much of business is going along with it then?

Gareth Davies: They’re not.

Krishnan Guru-Murthy: You know, business is quite sanguine and the markets have gone up, borrowing costs have gone up. But then it’s nothing like on the level of the Truss-Kwarteng budget…

Gareth Davies: That was quite an exceptional budget, that was a mistake. And then Rishi Sunak…

Krishnan Guru-Murthy: Exceptionally bad.

Gareth Davies: Yeah, absolutely. And Rishi Sunak came in and Jeremy Hunt came in, stabilised, and we were on the path to growth. We also, by the way, which Darren Jones was not mentioning funnily enough, was a global pandemic where we essentially shut the economy down and then a war in Ukraine which pushed up wholesale gas prices. It wasn’t anything to do with any budget, the inflation level. That was inflation that we saw across the globe. We got it down from 11 to 2%. The OBE are now saying that this Labour government are going to see inflation start rising again, unbelievably, while growth is not going to go up and debt is going to go up. It’s just, we’re trying to figure out what this is all about. I thought Rachel Reeves wanted to grow the economy, and the forecasts the OBR are showing are worse than they predicted growth would be in the March budget.

Krishnan Guru-Murthy: Based on numbers that can’t be relied upon any more because there have been material changes.

Gareth Davies: Not at all. This is fundamentally wrong that she’s imposing record taxes and debt is still going to go up. And she’s spending on things like GB Energy and National Wealth and all these gimmicks that are going to have absolutely no impact on growth. I think it’s important we hold them to account. That’s what we’ll continue to do.