Addressing MPs in the House of Commons this morning (September 23), the shadow chancellor of the exchequer said the chancellor's plans were based on an outdated ideology of rewarding the wealthy, which would in turn trickle down to benefit those less well off.
Chancellor Kwasi Kwarteng this morning announced plans to cut stamp duty, reform planning laws, reverse plans to raise corporation tax, and, the rabbit in the hat, abolish the additional rate of income tax of 45 per cent.
He also pledged give aways for new businesses and confirmed the government's energy price guarantee.
Responding to the chancellor's dubbed mini-Budget, which in actual fact comprised a sizeable package of reforms, Reeves said: "This statement is an admission of 12 years of economic failure. And now here we are. One last throw of the dice. One last claim that these ministers will be different."
She criticised prime minister Liz Truss for endorsing previous conservative governments' economic decisions when seemingly wanting to break away from these strategies now.
It is unprecedented to have a fiscal statement of this scale with no independent forecasts from the OBR.She pointed to the track record of those previous governments, saying they had left the country in a state of lower growth, lower investment and lower productivity "and today we learn that we have the lowest consumer confidence since records began.
"The only things that are going up are inflation, interest rates and bankers' bonuses...and borrowing."
She pointed out there have been six plans for economic growth from the government since 2010, before arguing the chancellor's new plan was not as much of a game changer as he would like people to believe.
"What this plan adds up to is to keep corporation tax where it is today and take national insurance contributions back to where they were in March.
"It's all based on an outdated ideology that says if we simply reward those who are already wealthy the whole of society will benefit. They've decided to replace levelling up with trickle down.
"As President Biden said this week, he is sick and tired of trickle down economics. And he is right to be. It is discredited, it is inadequate and it will not unleash the wave of investment that we need."
Reeves welcomed the government's measures to tackle the cost of energy for consumers, but criticised its refusal to tax energy giants and to borrow money to fund the policy instead.
"Instead of standing up for working people, the Conservatives chose to shield the gigantic windfall profits of the energy giants, leaving tens of billions of pounds on the table and pushing all of the costs onto government borrowing, to be paid for by current and future taxpayers.
"The oil and gas producers will be toasting the chancellor in the boardrooms as we speak, while working people are left to pick up the bill.
"Borrowing higher than it needs to be just as interest rates rise and yet the chancellor refuses to allow independent economic forecasts to be published, which would show the impact of this borrowing on our public finances, on growth and on inflation."
She also pointed to concerns from within the Conservative party about some of the measures that were included in the new strategy, such as keeping corporation tax low.
The conservatives are the cost of living crisis, and our country cannot afford them any more.She said: "Evidence shows that low rates of corporation tax are not the best way to boost investment and productivity and the Tories' own record shows that. Britain has the lowest headline rate of corporation tax in the G7 but we also have the lowest rates of business investments of the G7.
"That's why Labour would do what businesses are actually asking for, using targeted investment allowances to boost productivity and growth and scrapping outdated and unfair business rates that harm our high streets and small businesses, replacing them with a system that's fit for the 21st century."
Taking aim at the government's plans to create low tax investment zones, she said these were now new. "Every time they were tried, all they have achieved was moving growth around the country, not creating it.
"The best way out of the high tax low growth spiral that the Conservatives have created is to get the economy firing on all cylinders in all parts of the country.
"The chancellor has made clear who his priorities are today, not a plan for growth, a plan to reward the already wealthy, a return to the trickle down of the past. Back to the future, not a brave new era."
No independent forecast
Reeves also criticised the government's refusal to allow the Office for Budget Responsibility to publish an independent economic forecast based on the proposed measures.
The chancellor said a forecast would be published later this year and in the new year.
But Reeves said: "Mr Speaker, it is unprecedented to have a fiscal statement of this scale with no independent forecasts from the Office for Budget Responsibility. Never has a government borrowed so much and explained so little.
"Economic institutions matter, yet this government has undermined the Bank of England, sacked the respected permanent secretary at the Treasury and silenced the Office for Budget Responsibility. This is no way to build confidence. This is no way to build economic growth."
She said today's statement was "more than a clash of policies. It is a clash of ideas, two different ideas about how our country prospers.
"If you are a pensioner worried about the cost of living, a working family see your mortgage rate going up, a small business whose costs are spiralling the government's announcements today do little to reassure them.
"Bigger bonuses for bankers, huge profits for energy giants shamelessly shielded by Downing Street and all the while ministers pile the crushing weight of all of these costs onto the backs of taxpayers.
"The value of sterling has fallen, we can see it, half his colleagues suspect it and financial markets know it. The verdict is clear. When it comes to the economy this Tory leadership do not know what they are doing.
"The Conservatives cannot solve the cost of living crisis, the Conservatives are the cost of living crisis, and our country cannot afford them any more."
carmen.reichman@ft.com
