In a new blow, Rachel Reeves was forced to admit on Friday that figures showing the UK economy unexpectedly declined were “disappointing”.
Reeves has only been Chancellor since the summer. (Image: Getty)
Rachel Reeves only became Chancellor in July, but got off to an awful start, announcing almost immediately that she would seek to means-test Winter Fuel Payments, depriving millions of older people the support they need.
Her brutal Budget in October, Labour’s first in 14 years, sparked further fury, perhaps most notably among farmers. Many were incensed over her decision to cut agricultural relief, sparking large-scale demonstrations in central London backed by the likes of Nigel Farage and Jeremy Clarkson.
In a further blow, Reeves was forced to admit on Friday that new figures showing the UK economy unexpectedly declined were “disappointing”.
The Office for National Statistics (ONS) said gross domestic product (GDP) contracted 0.1% in October, despite most economists expecting it to rise by 0.1%. It’s been a torrid few months for Reeves, but is she really the worst chancellor Britain has had, as her critics claim?
Responding to ONS figures today, the Chancellor said: “We are determined to deliver economic growth as higher growth means increased living standards for everyone, everywhere. This is what our Plan for Change is all about.
“While the figures this month are disappointing, we have put in place policies to deliver long-term economic growth.
“We have put public finances back on a stable footing, capped the rate of corporation tax at the lowest level in the G7, established a £70 billion National Wealth Fund to drive growth in our towns and cities, launched a 10-year infrastructure strategy and are creating pension mega funds to boost investment in British businesses, infrastructure and clean energy,” she added.
Shadow business secretary Andrew Griffith said the figures would be “no surprise to anyone who has been listening to business after Labour’s disastrous budget”.
Liz Webster protests with farmers against Labour’s budget
The ONS’s director of economic statistics Liz McKeown said: “The economy contracted slightly in October, with services showing no growth overall and production and construction both falling.
“Oil and gas extraction, pubs and restaurants and retail all had weak months, partially offset by growth in telecoms, logistics, and legal firms.
“However, the economy still grew a little over the last three months as a whole.”
The ONS release is just the latest blow for Reeves who has faced bitter opposition to her various cost-saving measures.
Last month The Telegraph‘s head of money Ben Wilkinson, said: “At least she can now put ‘Britain’s worst Chancellor’ on her CV,” branding her Budget “cruel and needless”.
Long before the Budget, Reeves announced in September that, from winter 2024/2025, households in England and Wales would no longer be entitled to the Winter Fuel Payment
Labour has claimed the parlous state of the economy left by the former Conservative government meant tough decisions had to be made, pointing to a “£22billion black-hole” in the nations finances, which the Tories reject.
But the move sparked anger among many pensioners, with critics warning the policy could exacerbate fuel poverty amid rising energy costs, leaving vulnerable individuals struggling to heat their homes this winter.
Reeves emphasised her commitment to protecting the most vulnerable, stating, “I am determined to ensure that the poorest pensioners are protected and will still get winter fuel payments, and indeed, to ensure that pension incomes continue to increase with the triple lock.”
Sir Keir Starmer also defended the decision to alter winter fuel payments, with the Prime Minister insisting that while it “makes sense,” some Budget choices were made reluctantly.
Reeves acknowledged in an interview with the BBC‘s Chris Mason just days after the Budget announcement that, “This is not the sort of Budget we would want to repeat,” but said the intervention was “needed to wipe the slate clean and to put our public finances on a firm trajectory”.
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