Reeves tries to lift Labour gloom by pledging ‘No return to austerity’

Rachel Reeves will attempt to lift the gloom that has settled over Labour’s conference in Liverpool with a pledge that there will be “no return to austerity”.

In a bid to offer some hope, she will 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.”

But the message threatens to come across as jarring amid growing concerns among Labour activists about government cuts and tax rises in her Budget next month.

The chancellor will attempt to reset the narrative by insisting that she is “optimistic” for Britain.

It comes as the Labour leadership has faced a tirade of criticism over Sir Keir Starmer and other senior ministers receiving thousands of pounds’ worth of gifts and freebies.

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And as activists gathered in Liverpool, the conference had the feeling of being under siege from protesters, with some supporting the Palestinians and others accusing Labour of preparing to slash public services.

In a disastrous interview on Sunday morning with the BBC’s Laura Kuenssberg, deputy prime minister Angela Rayner attempted to explain away the prime minister’s acceptance of gifts by asserting that “all MPs do it”.

Her response appeared to jar with the narrative of “change” Labour had promised at the election, along with the conference slogan, “Change begins”.

While Ms Rayner rallied from her interview with a barnstorming speech promising a series of red-meat socialist measures such as reform to private lettings and the housebuilding programme – for which she was loudly cheered – other speeches, including those by foreign secretary David Lammy and health secretary Wes Streeting, had a much more muted reception.

Ms Rayner’s fellow cabinet ministers will today attempt to inject a sense of purpose and mission into the party membership – notably transport secretary Louise Haigh, who is leading the charge on renationalising rail and bringing bus services into public ownership.

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But against a barrage of criticism over her own acceptance of clothing donations and her decision to cut the winter fuel allowance for 10 million pensioners, Ms Reeves will today make a concerted effort to lift the “gloom” after Sir Keir used pre-conference interviews to warn that “things will get worse”.

She has been accused of potentially damaging Britain’s economic recovery with her downbeat message centred on claims of a £22bn black hole in the public finances.

Meanwhile, union leaders, led by Unite general secretary Sharon Graham, are using the conference to push for a different direction to be taken from the prudent one set by the chancellor.

Ms Reeves will use her speech today to promise that there will be “no return to austerity”. But she will temper this with a warning that the legacy left by the Conservatives will mean making “tough decisions”.

She will say that “growth is the challenge and investment is the solution”.

“I believe in a better Britain. A Britain of opportunity, fairness, and enterprise. 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.”

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Ms Reeves is expected to say: “I can see the prize on offer, if we make the right choices now. And stability is the crucial foundation on which all our ambitions will be built; the essential precondition for business to invest with confidence and families to plan for the future.

“The mini-Budget showed us that any plan for growth without stability only leads to ruin. So we will make the choices necessary to secure our public finances and fix the foundations for lasting growth.

“Stability, paired with reform, will forge the conditions for business to invest and consumers to spend with confidence. Growth is the challenge, and investment is the solution.”

She will insist that growth is the Labour government’s No 1 mission, to “create jobs that pay enough to raise a family on, for you and your children. Put real money in the pockets of working people and wealth in all our communities, that flows into vibrant high streets.”

“This is how we’ll achieve what we promised – a decade of national renewal,” she will say.

Addressing the topic of the Budget next month, Reeves is expected to say: “There will be no return to austerity. Conservative austerity was a destructive choice for our public services – and for investment and growth, too.

“We must deal with the Tory legacy, and that means tough decisions. But we won’t let that dim our ambition for Britain. So it will be a Budget with real ambition. A Budget to fix the foundations. A Budget to deliver the change we promised. A Budget to rebuild Britain.”

She will add: “My Budget will keep our manifesto commitments. Every choice we make will be within a framework of economic and fiscal stability.

“We said we would not increase taxes on working people, which is why we will not increase national insurance, the basic, higher or additional rate of income tax, or VAT. And we will cap corporation tax at its current level for the duration of this parliament.”