Kemi Badenoch: Labour presiding over ‘tax doom loop’
Opposition leader Kemi Badenoch has accused the Labour government of leading the UK into an economic crisis of low growth and high spending, as she urged the government to prioritise deep welfare cuts over increasing taxes at the Autumn Budget.
In a speech delivered to the Institute of Chartered Accountants’ Hall, Badenoch called out the economic malaise facing the UK.
Badenoch claimed the government had created a “tax doom loop” that it was destined to worsen in the coming weeks, with future generations left having to pay off debt and struggle with a difficult jobs market.
“The fundamental problem is our economy is being run by people who think it is government that creates growth. It’s not. It’s business that creates growth. We know that you cannot tax your way to growth.”
The Tory leader said “pride” was behind Labour’s failure to stimulate meaningful growth:
“They are making no real effort to live within their means, because they’re worried, living within their means doesn’t look ‘nice’.
“So instead, they are leading Britain into a deeper and deeper crisis, because of their pride.”
Badenoch calls out Labour’s ‘entitlement’
Badenoch claimed that young Brits would be entering a job market “fundamentally changed by AI” and have to compete with talent from growing economies while having to pay more for health and social care.
She pointed to “inflation-busting” pay deals struck by the government for public sector workers and backbenchers’ refusal to cut “spiralling” spending for health and disability payments as examples of Labour’s failure to live up to the realities of pressures on public finances.
“Our children will be paying for all of this with interest on top, compounded over decades.”
“Britain’s standard of living is not an entitlement, it is the sum of our collective efforts.”
“There is no guarantee that we will enjoy a particular quality of life just because we are the United Kingdom.”
Tories at odds with economists over spending
The Tory leader reiterated party policies to ditch the Employment Rights Bill, which is widely opposed by top business groups, and introduce £9bn savings to the welfare budget as a minimum.
Badenoch has previously backed the triple lock pension, defending it as “Conservative policy” in a nod to previous Chancellor George Osborne’s decision to introduce the uprating mechanism in the era of the Coalition government.
Leading economists at City firms and at the Office for Budget Responsibility (OBR) have said the triple lock pension was “unsustainable”. Reform UK’s Zia Yusuf has said the party was still yet to make a decision on whether it would keep it.
Opposition parties including the Conservatives also opposed Chancellor Rachel Reeves’ move to cut winter fuel payments, a £2bn saving that was later partially reversed due to backlash from voters and influential groups.
Badenoch said the Tories were ready to “help” the government with cutting the welfare budget, which is reportedly being considered by Starmer’s government after an initial attempt was struck down by Labour backbenchers.
The offer was swiftly rejected by Reeves during a hearing in the House of Commons on Tuesday.
Badenoch said the Tories are the only party facing up to economic reality, saying “we all have to accept that Government cannot do everything” and that the country faces “difficult choices.”
“We need to have difficult conversations not just about what government can do, but about what it cannot do. State spending is nearly half of GDP.
Nobody sensible thinks that’s sustainable.”