Rachel Reeves says new government has inherited ‘worst set of circumstances since second world war’ – UK politics live

Rachel Reeves is delivering her first major speech as chancellor.

She started by announcing that before the summer recess she will make a statement to MPs about the government’s spending inheritance. She said what she has seen in her first 72 hours confirmed that the economic situation was as bad as she thought.

She said:

I have repeatedly warned that whoever won the general election would inherit the worst set of circumstances since the second world war.

What I have seen in the past 72 hours has only confirmed that. Our economy has been held back by decisions deferred and decisions ducked. Political self-interest put ahead of the national interest. A government that put party first and country second.

We face the legacy of 14 years of chaos and economic irresponsibility.

That is why over the weekend, I instructed Treasury officials to provide an assessment of the state of our spending inheritance so that I can understand the full scale of the challenge. And I will present this to parliament before the summer recess.

This will be separate from a budget that will be held later this year. And I will confirm the date of that budget alongside a forecast from the Office of Budget Responsibility in due course.

This sounds like a major “blame the Tories’” exercise. In an extract from the speech released in advance, she said taxpayers were losing out because of the way growth stalled under the last government. She said:

New Treasury analysis I requested over the weekend exposed the opportunities lost from this failure.

Had the UK economy grown at the average rate of OECD economies since 2010, it would have been over £140bn larger.

This could have brought in an additional £58bn in tax revenues last year alone to sustain our public services.

It falls to this new government to fix the foundations.

UPDATE: There was a transcription error in an earlier version of this post. It said that what the Treasury had found in the past 72 hours showed there was “no money left”. That phrase was wrongly included by mistake, and has now been removed from the quote above.

Several newly elected Labour MPs have criticised the reliability of train services after suffering disruption during journeys to take their seats in the House of Commons, PA Media reports.

This is from Paul Foster, the MP for South Ribble.

This is from Claire Hughes, MP for Bangor Aberconwy.

Andrew Ranger, MP for Wrexham, posted this reply to Hughes.

Avanti was not the only service to let new MPs down. This is from Josh Fenton-Glynn, MP for Calder Valley.

This is from Kirith Entwistle from Bolton North East.

And this is what Henry Tufnell, MP for Mid and South Pembrokeshire, posted on X yesterday.

The Centre for Policy Studies is not the only rightwing, free market thinktank that has welcomed Rachel Reeves’ speech. (See 1.38pm.) The Institute for Economic Affairs, which was Liz Truss’ favourite thinktank, is also enthused by the plan to ease planning restrictions (although it would like Reeves to go further). It has released a statement saying:

Rachel Reeves is right to emphasise the importance of growth in tackling Britain’s challenges. Everything from funding public services to a higher quality of life is possible with more growth.

Undoubtedly, the most exciting part of the agenda is the government’s immediate plans to reform the planning system, including restoring housing targets, cutting red tape for major projects and ending the de facto ban on the on-shore wind. The emphasis on using powers to promote growth could unlock major opportunities. But this must be the floor, not the ceiling, of the government’s ambitions. Far more reform will necessary to be done to solve the housing crisis.

And the Adam Smith Institute also says Reeves is heading in the right direction.

It has been harder to find reaction to the speech from leftwing thinktanks. But the New Economics Foundation has issued a statement criticising Reeves’ decision to rule out raising money for the Treasury by cutting interest payments paid to banks that hold money with the Bank of England (see 11.05am). Hannah Peaker, director of policy at the NEF, said:

If we want to see decent growth again, our new government can’t be afraid to spend. A new government has plenty of ways to raise money, from borrowing responsibly to taxing the wealthiest to scrapping stealth subsidies to banks.

Remaining wedded to outdated and arbitrary fiscal rules will hold our economy back. Our fiscal rules aren’t an accurate measure of how much a government can responsibly borrow — and the chancellor could choose to replace them with the wave of a pen.

The Greens have celebrated their election haul of four MPs with a joint photoshoot opposite parliament, promising to put pressure on Labour in areas including the environment, housing and wealth taxes.

Carla Denyer, Adrian Ramsay, Siân Berry and Ellie Chowns hugged each other in delight as they arrived on College Green, having not seen each before the election, which saw the party win handsomely in all of the seats they had been targeting.

Berry had been the favourite to retake the Greens’ sole previous seat of Brighton Pavilion, held by the now-departed Caroline Lucas since 2010, while Denyer, one of the co-leaders, had been tipped to win in the similarly urban-bohemian enclave of Bristol Central, where she ousted Labour’s Thangam Debbonaire.

But the party also won two more rural seats against primarily Conservative opposition: Ramsay, the other co-leader, in Waveney Valley, which straddles the Norfolk-Suffolk border, and Chowns in North Herefordshire.

Speaking to the Guardian after the photos, Denyer said winning all four seats had been seen as possible, but “it certainly wasn’t guaranteed”. She said: “Based on both polling and our own door knocking data, it was looking pretty close, right up to the last minute.”

One impact of moving from one to four MPs is that the Greens will, for the first time, need a party whip, Denyer said.

The Green party is a bit different in that we don’t whip our members on how they vote. But we still need that role to do inter-party negotiations about who gets to sit on which committee. So having a discussion about who gets that role is one of the things on the to-do list for this week, alongside getting a password to get how to connect to the wifi and all that normal first day at work stuff.

Asked what areas she hoped to pressure the Labour government on, Denyer said for her this included the climate, housing – “a massive issue”, she said, in her constituency – and better funding for public services, such as introducing wealth-based taxes, ruled out by Labour. She said:

It’s been disappointing to see Rachel Reeves already today repeating the, ‘There’s no magic money tree’ line when Labour have completely refused to consider ways that they could raise funds that would allow us to properly fund our public services.

Here is more from Robert Colvile from the Centre for Policy Studies on the Rachel Reeves’ speech.

Small bit of Kremlinology – worth noting that it’s Reeves who has announced the housing/planning stuff. Not that Rayner isn’t on board, but this is very clearly a core Treasury priority in a way that greatly amplifies its salience within Whitehall.

And this is from Ed Conway from Sky.

Also worth noting Rayner, Miliband, Reynolds, Kyle and others were there in the front row for the announcement this morning.That “united front” was one of the main things biz leaders who went along were remarking on afterwards

Housebuilders and property developers have welcomed the announcements from Rachel Reeves today. (See 12.44pm.)

This is David Thomas, chief executive at Barratt Developments, a property company.

We welcome the government’s commitment to reform of the planning system and their drive for growth. Building more new homes will bring huge economic and social benefits to the UK, and it is vital that local and central government are united with industry to plan positively to deliver high quality new homes and developments across the country.

This is from Melanie Leech, chief executive at the British Property Federation.

It’s very positive to see the new government hit the ground running on planning reform.

Housebuilding targets are a clear statement of intent and will help accelerate delivery. We need to build more homes of all tenure and type and so we urge the government to also consider bold targets for build-to-rent and affordable housing specifically. Housebuilding targets need to be supported with extra capacity in the planning system, so it’s good to see Labour also restate their commitment to get more planners in.

And this is from Daniel Browne, real estate and construction partner at Kingsley Napley a law firm.

Today’s announcement by Rachel Reeves will be very welcome to our developer clients.

A promise to increase planning officials across the country will help to ease delays in planning decisions but the real gamechanger is the review of green belt land. This will create new opportunities to build more houses, new towns and commercial hubs and should unlock investment and economic growth, first through a build and construction phase then later through the new purpose area when complete.

With a rising environmental lobby this may not be all plain sailing but developers will certainly be thinking afresh from today about the possibilities ahead and where they might be able to access land and spaces that was previously off limits.

The full text of Rachel Reeves’ speech this morning is now on the Treasury’s website.

The Centre for Policy Studies, a pro-Tory thinktank run by Robert Colvile, a co-author of the 2019 Conservative party manifesto, has released a statement praising Rachel Reeves’ speech on growth and planning. (See 12.44pm.) Colvile said:

Rachel Reeves is absolutely right to focus on the need for growth, and reforming the planning system as key to unlocking that growth. The devil will be in the detail, but today’s announcements on speeding up infrastructure delivery and holding councils’ feet to the fire on housebuilding are both welcome and extremely necessary – as the Centre for Policy Studies has long argued. Indeed, this agenda needs to be a cross-party priority.

We also welcome the new chancellor’s recognition that attracting private sector investment should be at the heart of Britain’s economic strategy – which is why we urge her not to undermine her own efforts by raising taxes on businesses, entrepreneurs and overseas investors in her forthcoming budget.

Turning back to Emily Thornberry not being made attorney general (see 11.45am), in a good column on the decision for the i, Anne McElvoy says this was Keir Starmer being ruthless, but not personal. McElvoy says:

This is strictly business, rather than personal. “Keir likes Emily. She’s a ‘war horse’ who has stuck it out in the opposition years,” says one senior barrister who knows both of them professionally. “But Keir has been director of public prosecutions and has a high opinion of his legal ability at the top level. And if you ask me whether he would take Emily’s advice over another in a crisis, the answer I’m afraid, was always going to be, ‘No.’”

Appointing [Richard] Hermer, one of the top public law figures who has been involved in fiendishly difficult issues – from proposed disinvestment in Israel to whether Sinn Féin’s former leader Gerry Adams could be sued by IRA victims (he argued not) – gives Starmer seasoned support in areas that might become an issue in his premiership.

These range from a proposal by the International Criminal Court to open up arrest proceedings against Israel’s leader Benjamin Netanyahu over the conflict in Gaza, to where the line lies on arming and advising Ukrainian forces fighting Russia and at what point the UK is judged to have entered the war as a participant.

At the last Labour conference Anneliese Dodds said that, if the party won the election, she would “become the UK’s first ever secretary of state for women and equalities”, sitting in cabinet.

Dodds does have the women and equalities brief. (See 10.41am.) But she is not a secretary of state, and she is not a full member of cabinet.

At the Downing Street lobby briefing, asked why this promise had not been kept, the PM’s spokesperson said he could not comment on political matters, but he said Dodds would be attending cabinet and taking forward all the commitment on equalities set out in the manifesto.

Keir Starmer has promised to bring stability to Northern Ireland after receiving a warm welcome from all the main party leaders at Stormont.

The prime minister said he had a mandate for change and “a different way of doing politics” after Conservative-era turmoil. Speaking to reporters in Belfast he said:

One of the big problems of the last 14 years, but particularly the last six to eight years, has been instability, a lot of chopping and changing. That all ends today.

Starmer reiterated a pledge to repeal the controversial Legacy act that offers conditional amnesty to soldiers and paramilitaries involved in the Troubles and said he would “reset” relations with the Irish government. Dublin has taken a legal case in the European court of human rights against the legislation, which is also opposed by Northern Ireland’s political parties.

Starmer batted away a question on a potential referendum on Irish unification by saying he was “absolutely committed to the Good Friday agreement”, which calls for a referendum if a majority appears to favour unification, a condition not currently met.

The prime minister had back-to-back meetings with the leaders of Sinn Féin, the Democratic Unionists, Ulster Unionists, Alliance and the SDLP. All expressed hope for a new start in relations with London and more funding for public services.

Ed Miliband, energy secretary, has posted this on X about the lifting of the de facto ban on new onshore wind projects (see 12.01pm), saying it was an example of a bad Tory decision that put up energy bills.

This government was elected with a mandate to take immediate action to boost Britain’s energy independence.

The onshore wind ban is a symbol of how bad decisions in the last fourteen years have put up energy bills for families.

Today, it ends.

In her speech this morning Rachel Reeves, the chancellor, gave details of seven policies the government is pursuing to relax planning rules and promote development. She said she had done more to unblock the planning system in 72 hours than the Tories did in 14 years.

The speecy is not on the Treasury’s website yet, but here is the key passage.

Today, alongside the deputy prime minister [Angela Rayner], I am taking immediate action to deliver this Labour government’s mission to kickstart economic growth, and to take the urgent steps necessary to build the infrastructure that we need, including 1.5m homes in the next five years.

The system needs a new signal. This is that signal.

First, we will reform the national planning policy framework, consulting on a new growth-focused approach to the planning system before the end of the month, including restoring mandatory housing targets.

And as of today, we are ending the absurd ban on new onshore wind in England. [See 12.01pm.]

We will also go further and consult on bringing onshore wind back into the nationally significant infrastructure projects regime, meaning decisions on large development will be taken nationally, not locally.

Second, we will give priority to energy projects in the system, to ensure that they make swift progress. And we will build on the spatial plan for energy by expanding this to other infrastructure sectors.

Third, we will create a new taskforce to accelerate stalled housing sites in our country, beginning with Liverpool central docks, Worcester Parkway, Northstowe and Langley Sutton Coldfield, representing more than 14,000 homes.

Fourth, we will also support local authorities with 300 additional planning officers across the country.

Fifth, if we are put to put growth at the centre of our planning system, that means changes not only to the system itself, but to the way that ministers use our powers for direct intervention.

The deputy prime minister has said that when she intervenes in the economic planning system, the benefit of development will be a central consideration, that she will not hesitate to review an application with a potential gain for the regional and national economies warranted.

And I welcome her decision to recover two planning appeals already, for data centres in Buckinghamshire and in Hertfordshire.

To facilitate this new approach, the deputy prime minister will also write to local mayors and to the Office for Investment to ensure that any investment opportunity with important planning considerations that comes across their desks is brought to her attention and also to mine.

The deputy prime minister will also writes to local planning authorities alongside the national planning policy framework consultation, making clear what will now be expected of them, including universal coverage of local plans and reviews of green belt boundaries. These will prioritise brownfield and grey belt land for development to meet housing targets where needed.

And our golden rules will make sure that the development this frees up will allow us to deliver the thousands of affordable homes soon, including more for social rents.

Sixth, as well as unlocking new housing, we will also reform the planning system to deliver the infrastructure that our country needs.

Together, in these early days of this new Labour government, we will ask the secretary of state for transport and the secretary of state for energy security and net zero to prioritise decisions on infrastructure projects that have been sitting unresolved for far too long.

And finally, we will set out new policy intentions for critical infrastructure in the coming months, ahead of updating relevant national policy statements within the year.

I know that there will be opposition to this. I’m not naive to that. And we must acknowledge that trade offs always exist. Any development may have environmental consequences, place pressure on services, and rouse voices of local opposition.

But we will not succumb to a status quo which responds to the existence of tradeoffs by always saying no, and relegates the national interest below other priorities.

This Labour government has been elected on a mandate to get things done, to get Britain building again. We will make those tough decisions to realise that mandate.

With these steps, we have done more for unblock the planning system in the past 72 hours and the last government did in 14 years.

Yesterday Marcus Fysh, the former Tory MP, said the Conservative party was not a “viable entity” any more and that “it should no longer exist”. Anyone using X today might conclude Fysh has got his wish, because the Conservative party’s official X feed says the account does not exist.

But the Tories aren’t being closed down. According to party source, this is just a glitch with X, affecting various accounts, and they are trying to sort it out.

In her speech this morning Rachel Reeves, the chancellor, said the government is removing the de facto ban on new onshore wind projects.

The ban was enforced by two footnotes to the national planning policy framework (NPPF), the rules which govern the building of homes and infrastructure. T

These footnotesonly applied to onshore wind, no other type of infrastructure, and they required such strong proof there was no opposition from the local community that it made building the turbines impossible, as there is always some opposition to any form of building within communities.

In Labour’s proposed NPPF these footnotes have been deleted in their entirety, meaning that onshore wind projects are now on an even footing with all other forms of infrastructure.

Environment and energy groups have responded with delight.

Mike Childs, head of science, policy and research at Friends of the Earth, said:

By ending the onshore wind ban in England, Labour is making an important stride towards delivering on our climate goals, while also paving the way for lower bills, as renewables produce some of the cheapest and cleanest energy available.

In April, research by Friends of the Earth found that utilising less than 3% of land in England for onshore wind and solar could produce 13 times more clean energy that currently generated – enough to power all households in England twice over. By harnessing the country’s vast renewable power potential, the new government is staking its claim as a global leader in the green energy transition.

Sam Richards, CEO of pro-growth campaign group Britain Remade and former environmental adviser to Number 10, added:

The only way we are going to see the growth Britain desperately needs is if we make it significantly easier to build the homes and the new sources of clean energy needed to reach net zero. During the election Labour promised to fix our outdated and sclerotic planning system to just that, and with this speech the new chancellor is hitting the ground running.


Updated: Juli 8, 2024 — 3:37 pm

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