Rachel Reeves has insisted she was optimistic about the UK’s economic future as she attempted to persuade critics that there would be no return to austerity under Labour.
The Chancellor will address the Labour Party conference later on Monday as she attempts to strike a more upbeat tone following months of stressing the need to take “tough decisions” to deal with the legacy she inherited from the Tories.
But she faces a backlash from Labour’s union backers over her decision to strip winter fuel payments from millions of pensioners, with a conference showdown expected later this week.
Her speech comes with Labour still facing questions about “freebies” of clothing, holidays, concert tickets and football match hospitality accepted by Ms Reeves, Sir Keir Starmer and Angela Rayner.
Ahead of her keynote speech in Liverpool, the Chancellor said Labour would back investment to help the UK in the “global race” for the jobs and businesses of the future.
“There’s not going to be austerity under Labour,” she told Times Radio.
“Not only did it do huge damage to our public services, but it also did huge damage to our economy, because it choked off the investment that is needed to grow the economy.”
With her first Budget on October 30, Ms Reeves said her plan “will be about protecting living standards, fixing the National Health Service, and then, crucially, about rebuilding Britain”.
“Because we can’t keep cutting investment spending, which is what the previous Conservative government did, and that chokes off the private investment that is necessary to grow our economy.
“We need that infrastructure, the housing, the energy infrastructure, the digital infrastructure, the research labs.
“I want them here in Britain, there’s a global race on for some of the jobs and industries of the future, whether it’s in life sciences, low carbon energy or tech.”
There were “loads of reasons to be optimistic” but “investment doesn’t come by chance”, Ms Reeves said.
“We’re going to back the builders, not the blockers, and bring that investment back to Britain,” she added.
In response to questions about Labour figures accepting clothing donations – Ms Reeves received thousands of pounds’ worth from friend Juliet Rosenfeld – Ms Reeves acknowledged “it looks a bit odd”.
She told Times Radio: “Juliet and me have been friends for a long time and she said to me about a year-and-a-half ago ‘I want to help you in the election campaign and the thing I’d really like to do is make sure that for big events and for the campaign trail, you’re smart and well turned out’.
“I really appreciated that, she’s made a big difference to me. That’s not something that I’m going to do in government.”
She added: “I can understand that to a lot of people it looks a bit odd. I get that.”
While senior Labour figures will no longer accept clothing donations now they are in office, Ms Reeves said other gifts would still be permitted: “As long as things are declared properly, so people can see if there’s any conflict of interest, I think it’s fine to go to the football and to go to a pop concert. I don’t begrudge people doing that.”
The Chancellor looks set to avoid her speech being overshadowed by a humiliating conference defeat over the winter fuel decision, with a vote on the issue likely to be pushed to Wednesday.
Unite and the Communication Workers Union (CWU) have put forward motions which were due to be debated on Monday afternoon, with strong support expected from other unions.
Sources said unions were told late on Sunday that the debate is being moved to Wednesday morning.
CWU officials will not be at the conference on Wednesday as they will be attending the funeral in Scotland of the union’s former assistant general secretary Andy Kerr, who used to be on Labour’s national executive committee.
Unite and the CWU are opposed to changing the day of the debate and are trying to get the decision reversed.
“It is weak politics and shows a lack of leadership. It should be debated today,” said one union official.
Another official described Labour of being “tin-eared”.
Scores of retired members of Unite will stage a protest outside the conference centre at lunchtime as part of the union’s campaign against the winter fuel allowance cut.
Ms Reeves defended her position, arguing that increased take-up of pension credit – which will now be used to determine eligibility for the winter fuel payments worth up to £300 – and state pension rises would protect incomes.
“Already, the triple lock means that the pension this year is worth £900 more than a year ago, I’ll announce at the Budget probably another increase of around £460 next April, and over the course of this parliament, the new state pension is likely to rise by £1,700.
“So, we are protecting pension incomes through the triple lock, which means that they will go up by the highest of inflation, 2.5% or earnings.”
The chancellor was asked on LBC whether the debate on the winter fuel payment being moved to the conference’s final morning was Labour “running scared of this vote taking place prior to the Prime Minister’s address”.
She said: “I don’t know the situation about when votes take place, but if delegates want to vote on this, they will get a vote on this.
“I don’t know the timing of the vote, but we’ve already had a vote in Parliament where it was overwhelmingly passed.”
In the conference hall, there were boos as it was confirmed a vote would not take place on Monday.
Unite’s Andy Green said it was an “outrage”, telling delegates: “This is simply an attempt to take out the debate on the winter fuel allowance.”
Sharon Graham, Unite’s general secretary, told the PA news agency: “Right now it is fair to say that the Labour leaders have tried to silence the voice of pensioners, workers and communities at party conference, in this blatant manoeuvre to block debate on winter fuel cuts and the departure towards austerity mark II.
“When this becomes widely known there will be real anger among everyday people.”
Dave Ward, general secretary of the CWU, said he was “really disappointed” that the debate on the winter fuel allowance has been put back to Wednesday.
“It should have been heard today,” he told PA. “We will continue to campaign for the policy to be reversed whatever the outcome of the vote.
“We don’t accept that it is good economics or the right policy for the Labour Party to be pursuing.”
