Tough choices now but UK’s best days lie ahead, says Rachel Reeves

Rachel Reeves has said there will be “difficult choices” but the country’s “best days lie ahead” as she prepares for her speech to the Labour Party conference in Liverpool.

Ms Reeves told the BBC the “prize” of her approach would be “strong growth” and “wealth in all our communities”.

The chancellor is under pressure to provide some optimism after Labour’s gloomy messaging on the state of the economy.

Her decision to axe winter fuel payments for 10 million pensioners had threatened to overshadow her speech, but a vote challenging the move could now be moved to Wednesday.

Unite chair Andy Green said it was an “outrage” and “disrespectful” to party members that the motion had been moved from Monday.

Unite’s motion had received backing from other unions. Aslef boss Mick Whelan told the BBC: “I couldn’t go back and face my retired members section having voted” for the winter fuel payment cuts.

Speaking to the BBC ahead of her conference speech, Reeves said she had not “wanted” or “expected” to cut the payment but was was forced into the decision by her economic inheritance.

However, she insisted there would not be a “return to austerity” and that government spending would increase in real terms within the next four or five years.

The Treasury is also not expected to remove the council tax discount applied to single person households.

Addressing conference ahead of her first Budget on 30 October, Reeves will promise there will be “no return to austerity” and set out Labour’s vision for a “decade of renewal”.

She will confirm the appointment next month of a Covid corruption commissioner to help recoup £674m of disputed contracts the Conservatives had agreed to waive.

The chancellor will also vow to “seek out those who have ripped off the taxpayer, chase them down, take them to court, and claw back every penny of taxpayer’s money that they can”.

She will announce new measures to target tax dodgers and help close the £39.8bn shortfall between the amount of tax owed and that which has actually been collected.

The plans include recruiting 5,000 more taxmen over the next five years, with 200 new compliance officers set to start at HMRC in November.

On the economy more broadly, Reeves is expected to say: “My optimism for Britain burns as bright as it ever has done.

“My ambition for Britain knows no limits because I can see the prize on offer if we make the right choices now.

“I know that promise has felt far off in recent years, as our growth, productivity and family incomes have fallen behind – but it doesn’t have to be that way.”

In Liverpool, she will also warn of the need for stability to avoid a Liz Truss-style meltdown of the public finances, whilst also claiming she will avoid austerity.

Reeves will be hoping the message resonates with Labour supporters, with polls showing many are unhappy with the decision to stop winter fuel payments of up to £300 being handed out to every pensioner, regardless of wealth, from this year.

Labour’s leadership team has also come under fire from one of their own MPs over accepting donations of clothes despite their six-figure salaries.

York MP Rachael Maskell, who abstained in the vote to support Labour’s winter fuel plans earlier this month, posted on X that she was “sickened by revelations of ‘donations’.”

“It grates against the values of the Labour Party, created to fight for the needs of others, not self,” she wrote.

“Meanwhile pensioners are having their winter fuel payments taken, risking going cold. I trust conference votes to change this.”

On Sunday, Deputy Prime Minister Angela Rayner defended her decision to accept clothes, as well as a stay in Lord Alli’s New York penthouse on a trip to New York.

Speaking on Sunday with Laura Kuenssberg, she said she didn’t believe she had broken any rules.

On Monday, Reeves said she could “understand why people find it a little bit odd that politicians get support for things like buying clothes”.

She said that while shadow chancellor a friend had given her clothes to wear on the campaign trail and for big speeches.

She added that the donations had been declared but that she would not continue to accept such donations while a government minister.