Labour has inherited ‘worst set of circumstances since second world war,’ says Rachel Reeves

8 July 2024, 12:00 | Updated: 8 July 2024, 14:11

Chancellor Rachel Reeves has said the new Labour government has inherited 'the worst set of circumstances since the second world war.'

The new Labour Chancellor opened her first speech in post by insisting economic growth would be Labour's national mission, before saying she would undertake an assessment of the Government's "spending inheritance".

At a speech at the Treasury, the Chancellor 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 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 for Budget Responsibility in due course."

Chancellor Rachel Reeves said the date for the Government's first budget will be announced before the Commons' summer recess.

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The Chancellor went on: "Economic growth is about more than lines on a graph. This is about whether working people feel better off, whether our high streets and town centres are revived, whether there are good jobs paying decent wages in more parts of the country.

"Success for me will be whether working class kids from ordinary backgrounds have more opportunities than they do today, and I think those opportunities have gone backwards in the last few years."

She said some businesses had doubted "whether we are a safe haven for investment" in recent years, adding: "I want people when they look around the world to see Britain as a place that they can see a stable Government, with serious plans to grow the economy, a Government that is pro-business and pro-growth so that we can drive that private sector investment that is crucial if we are going to have those good jobs in all parts of the country."

Asked about criticisms from ex-prime minister Liz Truss about an "anti-growth coalition", Ms Reeves said: "The anti-growth coalition are the Conservative Party and the British people kicked them out of office last week."

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Ms Reeves also announced several changes to planning rules.

Councils will be issued with mandatory targets to pave the way for 1.5 million new homes, including some built on greenbelt land, by the end of this parliament.

The government will create a new task force to accelerate stalled housing sites and support local authorities with additional planning officers across the country, which will include re-examining rejected planning applications that may be good for the economy.

Ministers are also looking to relax planning rules for major infrastructure projects, such as the installation of hundreds of miles of new electricity pylons needed to link up wind and solar farms to the grid, and end the de facto ban on onshore wind.