Public services like the NHS cannot be improved without major reforms, the shadow chancellor has said, as she insists that additional funding alone cannot fix the health service.
Speaking ahead of Labour’s conference on Sunday, Rachel Reeves told The Telegraph that it was “crazy” that patients were waiting “longer and longer” for appointments and “outcomes are deteriorating”.
In a clean break from the party’s previous vilification of NHS reforms under Jeremy Corbyn, Ms Reeves says: “I don’t think there is a way to improve public services without also reforming them.”
On Monday, Ms Reeves will set out Labour’s alternative plan to achieve economic growth, following the tax-cutting plan announced by Kwasi Kwarteng and Liz Truss on Friday, which she insists was designed “for the wealthy few”.
She uses an interview with The Telegraph to pledge that typical high street firms will pay lower business rates bills under Labour and reveals plans to carry out annual revaluations of premises and immediately pass on any savings in cases where the property’s market value has reduced.
Ms Reeves said the changes would benefit up to 700,000 businesses “in contrast to the Government’s corporation tax plans that would only help 90,000 businesses”.
She had already set out plans to increase the threshold at which firms begin paying business rates.
She points out that the Conservatives promised to review the business rates system in each of their 2019, 2017 and 2015 manifestos, adding: “Business rates reform... never materialises. We’re setting out how Labour will have a fairer system of business property taxation, which helps our high streets to thrive, which gives small businesses a chance to prove themselves and start making a profit.”
Addressing the NHS, Ms Reeves says: “I think people are genuinely worried about getting ill. If someone in my family was ill and called an ambulance, I just don’t have the confidence that it would necessarily be there on time. That's really scary, I think.”
She calls for Covid-era innovations such as online booking for appointments to be rolled out on a permanent basis, adding: “There does need to be reform of how public services work.”
The remarks represent a significant break from the approach of Mr Corbyn and John McDonnell, who focused on pledging more money for the NHS while painting Conservative plans to reform the health service as attempts at privatisation by stealth.
Meanwhile, Ms Reeves, whose conference speech last year was peppered with references to the need for “strong and lasting growth” might be forgiven for now insisting that she has “been saying for quite a long time now, that growth is really, really important”.
“The lack of growth is the cause of an awful lot of our problems as a country,” she says. “It’s one of the reasons why wages have shrunk over the last decade, one of the reasons why public services are on their knees, and it's one of the reasons why taxes are so high, actually.”
But Ms Reeves, who has been shadow chancellor for 16 months, insists that the Government’s plan for growth, unveiled on Friday, “will fail”.
“This idea that trickle-down economics, deregulating, and cutting taxes as fast as you can, is going to deliver 2.5 per cent growth, I just think that’s for the birds.
“It’s just not the key demand of business.”
Taking the example of Ms Truss’s decision to cancel the planned rise in corporation tax, she says: “Business rates resonated much more [with firms], that’s what gets raised with me - if it’s taxes, it’s business rates.”
Ms Reeves’s conference speech will argue that growth “comes from the bottom up and the middle out” - echoing a mantra also espoused by Joe Biden, based on the idea that prosperity must begin with the working and middle classes. Senior Labour figures were delighted when Mr Biden adopted the phrase last week in a coincidentally-timed tweet in which he said he was “sick and tired of trickle-down economics” - the same description used by Ms Reeves of the Conservatives’ focus on tax cuts and deregulation.
She will also insist that Ms Truss and Mr Kwarteng are wrong to suggest that businesses will thrive as a result of “government getting out of the way. I am not sure if that has ever worked”, she says.
A third criticism Ms Reeves makes of Ms Truss’s regime is of its approach to “institutions and fiscal responsibility”. Ms Reeves, who was an economist at the Bank of England before entering Parliament in 2010, said the Chancellor made a “real mistake” when he sacked Sir Tom Scholar, the Treasury’s most senior civil servant, and the Conservatives risk economic damage by making “veiled threats about Bank of England independence”.
“My experience from working at the Bank of England and observing the Bank of England over many years now is that operational independence results in lower inflation, lower interest rates, and a more stable economy,” she insists. “If we put those things in peril then I think the result is higher inflation, higher interest rates, and a weaker pound. We’re already getting some of those things right now and I think it is dangerous.”
The fourth plank of Ms Reeves’ speech on Monday will be stating that “strong public services” are essential for growth. She links the performance of schools and hospitals to the health of the economy, stating: “If you talk to businesses it’s not long before they say we really struggle to recruit people with the skills that we need.
“We need schools educating and turning out young people who are ready for the world of work... We need a health service that is functioning properly, whether it’s physical or mental health, so we haven’t got more people dropping out of the labour market ... often because they are sick or unwell and not able to work.”
One successful participant in the labour market is her husband of 11 years, Nicholas Joicey, 52, a senior civil servant, who has been appointed as head of the Cabinet Office Economic and Domestic Affairs Secretariat, which has become the policy-making hub of the Government under Liz Truss.
Ms Reeves told The Telegraph the pair have successfully navigated the potential conflict between their two roles by being “really careful” about what they discuss.
“We were a couple at the general election in 2010 when I got elected - in fact, before the general election in 2010, he had to tell his permanent secretary that he was in a relationship with a Labour parliamentary candidate.
“He’s always done things incredibly properly, as you would imagine a senior civil servant would. We’ve always been really, really careful not to talk about those things where there could be any type of conflict of interest.”
She added: “Civil servants will have all different types of political views but you’ve got to serve the government of the day. And, I would say this, but I think that he does that really well, and he can only carry on doing that job if we are really careful at home not to talk about things where there might be a conflict of interest. But it’s fine. We’ve got plenty of other things to talk about.”
At home, Ms Reeves is in charge of household finances and has warned the couple’s son and daughter “that we need to be careful about how we use energy in the house” amid the cost of living crisis.
The approach mirrors the tight rein the shadow chancellor has been keeping on the party’s spending pledges. “I’ve been really determined, maybe sometimes to the annoyance of colleagues, that everything that we announce, we have to say where the money is going to come from.”
But, she suggests, there is an understanding among MPs that such discipline is going to be needed to reverse the party’s fortunes following more than a decade in opposition.
“I think everybody in the Labour Party, after the 12.5 years now of opposition, and most of us have never had the chance to serve in a Labour government... are really desperate to win.
“And we’re willing to take the difficult decisions that are necessary to rebuild that trust that people lost in us.”
However, she counsels against underestimating Ms Truss.
“She’s the longest serving Conservative Cabinet minister and she saw off however many rivals there were in the Conservative leadership contest. And so we’re not going to make that mistake of underestimating her.
“Labour’s got its work cut out to win back the seats we need to win the next election. It would be a serious error to think that we can take anything for granted because we have to work for every single vote in every constituency.”