"All the country got today was an invoice for the economic carnage that this government has created," Rachel Reeves has told MPs in response to the Autumn Statement.
Speaking in the House of Commons this morning (November 17), the shadow chancellor of the exchequer said Conservative governments of the last decade had led the country into a "doom loop".
She said the UK's economy was uniquely exposed to global headwinds due to recent Conservative policy under former Prime Minister Liz Truss.
Referring to the September "mini" Budget of previous chancellor Kwasi Kwarteng, which wreaked havoc on bond markets and the UK economy, she also accused the government of having imposed a "Tory premium" on mortgages which was hitting working people hard.
She accused Rishi Sunak's government of failing to take responsibility for the additional hardship caused and of continuing to "hold the country back" with its "mistakes".
She also blamed "failures" made by the Conservative party since it has been in power for today's £55bn tax raises and cuts to public spending.
"What people will be asking themselves at the next election is this: are me and my family better off with a Conservative government? And the answer is no.
"The mess we are in is the result of 12 weeks of Conservative chaos, but also 12 years of Conservative economic failure.
"[...] The chancellor should have come here today to ask for forgiveness at the very least.
"Instead, he says that his predecessor was correct in his analysis of his 'mini' Budget. The 'mini' Budget that put our economy into freefall. All the country got today was an invoice for the economic carnage that this government has created."
Today the chancellor froze income tax, IHT and National Insurance thresholds at their current levels until 2028.
He also lowered the threshold at which people start paying the higher rate of income tax of 45 per cent from £150,000 to £125,140.
Dividend and capital gains tax allowances were also cut, with the annual exemption for capital gains tax dropping from £12,300 to £6,000 from April 2024 and to £3,000 thereafter.
A Stamp Duty cut, introduced as part of September’s “mini” Budget, will remain in place until March 2025, the chancellor has said.
But Hunt also announced further funding for the NHS, help with energy bills, and to keep the pensions triple lock.
Meanwhile, perhaps one of the starkest announcements today was an admission by the chancellor that the UK economy is already in recession.
The Office for Budget Responsibility (OBR) forecast for the UK economy to decline by 1.4 per cent in 2023, a sharp downward revision from the forecast, made in March, which was for economic growth of 1.8 per cent.
The expectation is that economic growth will be 1.3 per cent in 2024, a downward revision when compared with the previous 2.1 per cent.
But the chancellor said he believes his measures announced today would lead to a "shallower downturn" in public finances than would otherwise be the case.
Reeves blamed "12 years of Conservative stagnation that has left our country so much worse off".
She agreed that many of the world's economic problems were caused by Russia's invasion of Ukraine, but added "when the global storm hits, we are uniquely exposed because of the choices that the Conservatives have made.
"This is the price of a ticket of Tory choices and economic failure. And this is set to continue with the IMF forecasting that out of the 38 most industrialised economies the UK will have the slowest growth of any of them in the next two years."
Paul Johnson, director of the Institute for Fiscal Studies (IFS) said today's tax increases meant the tax take accounted for the largest proportion of GDP for 75 years.
Reeves said: "Let's be honest, no one was talking about cuts to public spending two months ago, and no other advanced economy is cutting spending or increasing taxes on working people as they head into recession."
She later said: "Never before have people paid so much in tax, and got so little in return."
She said the freeze in the personal allowance alone would cost an average worker more than £600 pounds.
She also condemned the chancellor's move to allow local councils to put up council tax by more, which she called a "tax bombshell worth £100 for a typical band D property, taking their council tax above £2000 for the first time.
"This government has forced our economy into a doom loop where low growth leads to higher taxes, lower investment and squeezed wages, the running down of public services, all of which hits economic growth again.
"And instead of learning from mistakes of the last decade, they are simply repeating them. We need to break free from this vicious cycle of stagnation with fairer choices and a proper plan for economic growth."
She added: "Achieving the levels of growth this country needs isn't like flicking on a switch. We need a serious long term plan to get our economy growing again, powered by the talents and efforts of millions of ordinary working people and 1000s of businesses.
"We need a fairer, greener, more dynamic economy, creating good jobs in every part of the country: in ... renewables, in clean hydrogen, in carbon capture and storage with Labour's green prosperity plan.
"An industrial strategy where government works hand in hand with business, properly fixing business rates, so that small businesses and our High Street businesses thrive again.
"And fixing the holes in the government's Brexit deal to help UK businesses trade and compete in the world. And ensuring that Britain is the best place to start and grow a business. That is what a Labour government will do."
carmen.reichman@ft.com
