Reeves: ‘If you want more NHS spending, you have to support tax rises that pay for it’
Tory MP Dame Harriet Baldwin questions the chancellor on economic forecasts and the change since Labour entered government.
She says last year, the International Monetary Fund (IMF) said “growth is recovering faster than expected, inflation has fallen rapidly to target”.
But since the budget in October, the Office for Budget Responsibility (OBR) has said inflation will likely increase this year – as will borrowing, unemployment, debt interest payments, and children in poverty.
Coupled with rising bills this month and potential Trump tariffs, she asks the chancellor if she “recognises” business and consumer confidence have been hit since the budget.
‘I accept there are costs of any policy’
Rachel Reeves replies that the IMF was “very supportive” of the budget, and supports the fiscal rules that she is sticking to in order to bring “security back to the economy” while unlocking investment.
She goes on to say growth forecasts for countries around the world have been slashed, while the OBR has upgraded the growth forecast from next year onwards.
“They forecast that by the end of the forecast period, the economy will be bigger than they forecast at the Conservatives’ last budget, and indeed, bigger than they forecast at the budget I delivered last autumn,” she says.
Baldwin pushes the chancellor on the question of consumer and business confidence, and she replies: “I absolutely accept that there are costs of any policy, whether it’s on spending or tax.Â
“But there are also costs of irresponsibility.”
‘Extra money needs taxes to pay for it’
Although politicians are usually opposed to hypotheticals, Reeves posits that had she not increased spending, NHS waiting lists would not be falling, the public finances would not be on a “firm footing”, and the increase in defence spending would not have been possible.
Challenged again by Baldwin, Reeves says different people can have different priorities on what to do with available money.
She adds: “If you would prefer not to put that money into the NHS, you are absolutely at liberty to say that, but you have to be honest, because if you want that extra money, you have to support the taxes that pay for it.”
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