Rachel Reeves has refused to rule out a Labour government keeping the bedroom tax and abolishing the two-child cap on benefits because of the “dire economic inheritance” it would face.
The shadow chancellor said it was a “sad truth” that if the party came to power it would not be able to undo all the welfare policies it had opposed in parliament.
In an interview on BBC Radio 4’s Today programme, she was asked repeatedly whether the bedroom tax was staying. She said that full plans around benefits and taxation would be set out nearer the general election but made it clear that many Conservative policies would not be reversed.
Recalling the 13 years that the Conservatives have been in power, Reeves said she had “lost count of the number of times I’ve gone through the division lobbies and voted against what the government have done”, but added: “Does that mean we’re going to be able to reverse all of those things? The sad truth is we’re not going to be able to do that because of the dire economic inheritance that an incoming Labour government will face.”
The MP for Leeds West said ensuring control of public finances and a stable economy was “not a nice to have, it is the rock of stability upon which all other policies have to be built”.
Labour’s shadow work and pensions secretary, Jonathan Ashworth, last month called the two-child benefit cap “heinous” and hinted that he would scrap it. But when asked in a BBC interview on Sunday whether it would be abolished, Sir Keir Starmer said: “We’re not changing that policy”.
When it was put to Reeves that a colleague had said there were six policies such as the child benefit cap that the party wanted to scrap but could not, she said: “The truth is there’s more than six things that an incoming Labour government won’t be able to do. We’re going to have the most dire economic inheritance of any incoming government.
“The level of debt in the UK economy is the same size as everything we produce in the economy on an annual basis. Our interest rates and inflation are at staggering high levels and our economy is barely growing. It’s barely grown these last 13 years.”
Commenting on the drop in inflation to 7.9% for June, Reeves said families would still be feeling “huge pressure” on their finances.
“I think the numbers today confirm what families all know, which is that prices are still rising at quite a staggering rate – 7.9% higher than a year ago. If you look at the different things driving that, food price inflation is at 17.3%, so probably the most important thing that we buy every month is going up by twice the rate of the headline level of inflation.
“That is putting huge pressure on family finances when we all go to the supermarket on a weekly basis or whatever and we see the things that we used to buy are now 17%, sometimes more than that, than a year ago.”
Reeves said Labour would invest in new nuclear and renewables and insulating people’s homes to bring down energy bills, unpick holes in the UK’s “botched Brexit deal” and do more to help people back into the labour market.