Reality Check verdict: the wrong prescription
Yesterday, Angela Rayner called for a path to be cleared for Andy Burnham to be allowed to return to Westminster to save the Labour party and, presumably, the country. But she also set out her manifesto for fixing Britain’s economy and made a number of claims about the state of the country and what might be done to improve it. Reality Check took a look at some of her boldest claims:
CLAIM: ‘We must be the party of working people’
Rayner was ‘instrumental’ in the government abandoning plans to cut £5 billion from the planned increase in disability benefit spending by 2030. That means, on current projections, the working-age caseload for the main disability benefit, PIP, will rise from 2.7 million in 2023/24 to 4.4 million 2030/31. Only ‘around one-sixth of recipients are in work’, according to the OBR. Claimants of incapacity benefit – for those who cannot work – will rise from 3.3 million to 4.1 million and its cost will rise to £32 billion.
CLAIM: ‘Voters have turned to populists and nationalists because of the cost of living’
This is an often-repeated claim which does not necessarily bear out in political history. In the United States, as an example, real incomes were much lower in the 1990s and 2000s (when the US economy experienced multiple recessions) – a time of relative political calm – than they were in the 2010s, a decade where the US economy did not experience negative growth in a single quarter.
Rayner also ignores immigration which – whatever your view of it – is consistently the first or second most talked about issue in opinion polls.
CLAIM: ‘Now they see oil and gas companies use global instability to post record profits’
While oil and gas companies have been doing well out of the Iran crisis, they are not necessarily experiencing ‘record profits’, at least not yet. BP, as one example, had higher profits in Q2 of 2022 (after the Ukraine invasion) compared to today. Leaving that to one side, it is not as if these companies are making off like bandits. Windfall taxes on oil and gas companies, brought in since 2022 are already doing the job.
And are higher taxes really the answer? As the below Reality Check graph shows, we’re already planned to hike our tax burden by more than any other G7 nation. Isn’t repeatedly trying more of the same just a sign of madness?
CLAIM: ‘Countries including Spain and Canada have shown that economies can grow and people can thrive when governments stay true to labour and social democratic values and put people first’
Rayner is not wrong to look to Canada for inspiration, although it may surprise her to find out that Mark Carney, the technocrat who was appointed to the Bank of England by our very own George Osborne is on a tax-cutting spree at the moment, suspending fuel taxes and even cutting income tax, a promise from his 2025 election campaign which was labelled ‘cutting taxes for the middle class’.
CLAIM: ‘A rising minimum wage must go alongside our programme to get young people into work’
Any serious economist could explain to Angela Rayner that increasing the minimum wage even more is going to fuel more youth unemployment. Huw Pill, the Bank of England’s Chief Economist said just in February that increases in the minimum wage are making it harder for young people to find jobs. Rayner herself has been trying to eliminate the ‘discriminatory’ practice of having a lower minimum wage for younger people, despite the Low Pay Commission’s warnings that these changes risk increasing youth unemployment.
And though Britain may be heading in the direction of a low-work society, it is not a low-paid one. In fact our minimum wage as a share of average incomes is among the highest in the world.
CLAIM: We are in danger of becoming a party of the well-off, not working people
Rayner’s got this one right. More in Common polling shows that Labour support is 33 per cent among those who say they are ‘very comfortable financially’, falling to just 15 per cent of those who ‘often struggle to make ends meet’.
CLAIM: ‘Buses and trains being brought back into public hands can now operate for the public good, at prices passengers can afford.’
That nationalisation (or ‘public hands’) can bring down train fares is a bold promise, not one which her government necessarily agrees with. When the government decided they would nationalise Southwestern Rail last year, the Transport Secretary Heidi Alexander said that she could ‘not promise’ that fares would fall as a result of nationalisation, pointing out that the taxpayer already subsidises train travel. Somebody has to pay.
Graphs by John O’Neill
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