Shadow Education Minister Neil O’Brien has said that the UK is heading for a period of “stagflation” following the greater than expected rise in inflation announced today. He told GB News: “The Government can say it's disappointing, but it's the Government's fault. They've inherited a situation where it was low and falling and on target, and got to one where there is this surprising increase in inflation. “The alarming thing is it's against the backdrop where the economy is stagnating, unemployment is going up, but we're heading into a kind of stagflation, where the cost of living is going up, but the economy is going down.”FULL STORY HERE.
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00:01From page The Daily Telegraph today, Angela Rayner has been pushing the Chancellor Rachel
00:06Reeves to increase taxes on savers and high earners.
00:10Well, it's a leaked memo that's been seen by The Telegraph and the Deputy Prime Minister
00:14urges in it Rachel Reeves to reinstate the pension's lifetime allowance, increase taxes
00:19on dividends and freeze income tax thresholds ahead of the spring statement.
00:24And just to reiterate that other economic news this morning, inflation has soared 3.5%.
00:30That's up from 2.6% last month. And it's believed to have been caused by a rise in household bills.
00:40The Chancellor Rachel Reeves has been speaking in the past few moments.
00:43The numbers today are clearly disappointing. We want to see inflation coming down after
00:49the cost of living challenges that people have been through this last few years. Clearly
00:54we're in a different place to where we were under the previous government where inflation
00:58got into double digits. But we recognize the cost of living is still a challenge, which
01:04is why we increased the national living wage, giving a pay rise to three million people in
01:09April. It's why we're rolling out free breakfast clubs at primary schools to help families with
01:14the cost of living. And it's why we froze fuel duty in the budget last year.
01:21Well, let's cross live to Westminster now and speak to the shadow education minister,
01:24Neil O'Brien. Good to see you this morning, Mr. O'Brien. And can I get your reaction to
01:28those inflation figures out this morning, up to 3.5% from 2.6%?
01:33Well, the Chancellor admits that it's disappointing, but she has only herself to blame. She inherited
01:42a situation in which inflation was bang on target. And her tax increases and her record borrowing are
01:49leading inflationary pressures to make your cost of living higher. And everything the government is
01:55doing, be it Ed Miliband's green schemes, be it the government signing up to the EU ETS through this
02:01EU surrender deal, is pushing up your cost of living. So the government can say it's disappointing,
02:07but it's the government's fault. I mean, they've inherited a situation where it was low and falling
02:11in on target and got to one where this is a surprising increase in inflation. And it's against,
02:17the alarming thing is, it's against the backdrop where the economy is stagnating, unemployment is
02:22going up. And we're heading into a kind of stagflation where the cost of living is going up,
02:26but the economy is going down. I don't know if you've managed to see the front page of the
02:30Delhi Telegraph this morning. But it is that leaked memo from Angela Rayner to Rachel Reeves,
02:36her secret plan to tax savers going after those that pay the additional rate of income tax,
02:43also targeting pensions and shares rather than cutting services. What do you make of what you've seen?
02:51Well, I think it's very, very alarming. I mean, the Chancellor has already increased taxes to a record
02:55higher, a record share of the economy. And unbelievably, for a Labour government,
03:01a notionally social democratic government, they have done that by increasing taxes in a way that
03:06is targeted on low income workers, those who are grafting, working hard for a living, not earning that
03:11much. They are taking the biggest hit from the Chancellor's tax increases. And now their only plan,
03:16with this huge hole opening up in the private finances and everyone expecting there to be a big
03:20problem for the Chancellor this autumn, they are now casting about for even more tax increase
03:25tax increases, which the UK economy needs that like a hole in the head. I mean, we're already
03:29seeing the economy stagnating because of the tax increases that Rachel Reeves has pushed through
03:35already. The answer is not even more tax increases. The time is now to start looking at some of the
03:41government's crazy way for spending, which we should start by looking at this unbelievable Chagos
03:46surrender deal where we are handing over money to another country to have our own territory taken off
03:52of us. I mean, absolutely incredible abuse of taxpayers. We should be looking at things like
03:57that before we start increasing taxes even more. So what would you do with the Chagos Islands?
04:06We wouldn't be giving them away and we wouldn't be paying huge amounts of money to Mauritius for the
04:11privilege of giving away our own territory. I mean, there is nothing in it for us in this deal.
04:15No, no, no. This is entirely a Labour deal. We always talk to all these other countries,
04:22but we would never, ever, ever in a million years have signed up to this. You would never,
04:26ever have got this through a Conservative majority parliament. And we are totally,
04:30totally against this deal. So if they say, oh, you would have done this. No, we would have never
04:33done this in a million years. No one other than these guys would have signed up to this. Only
04:37Keir Starmer would pay another country to take our own territory off of us. Only he could be so
04:42ridiculous. And it's the same in the other deals that he's done. I mean, with the India deal,
04:46you now have a tax break for Indian workers, increasing immigration to this country.
04:52With the EU deal, you have, by connecting to their EU ETS, which is a form of tax,
04:57you already see energy costs going up in this country as a result of those deals. And whenever
05:01the guy goes into any kind of overseas negotiation, it's always about his image and him having a deal,
05:07no matter what the cost to people in this country is. And you can see that with what's happening
05:11to the economy and now what's happening to inflation as well. You talk about costs there. And I mean,
05:16most of us wouldn't care less about the Checos Islands if there was no consequence to spending
05:21and handing over that money. But you look at policies, you look at, for instance, I want to talk
05:26about education. The Labour government, they promised more teachers, they promised more teachers pay.
05:32We all think very good things. Why is that not working out? What's the problem?
05:36Well, the problem is the tax increases again. So Labour promised that they would fully fund the
05:44increase in the national insurance tax on state schools, but they broke that promise. And some
05:48schools have been left up to 35 percent short. And then they promised to fund the teachers pay deal,
05:54and they broke that promise too. And that is why across the country right now, schools are unbelievably
06:00making good teachers redundant. And according to the Institute for Fiscal Studies, they have created with
06:05these measures, an £800 million gap. And that translates into about 13,000 teachers losing
06:11their jobs unless something is done. Now, under the last government, we increased the number of
06:15teachers in England by 27,000. And now, in this week and next, schools across the country, and some of
06:21them are going public about this, are sacking good teachers because of the hole that has been created
06:27by Labour breaking their promises, particularly by breaking their promise that they would fully fund the
06:31tax increase on state schools. And they haven't done it. They said they would do it, and they have
06:35not done it. And now it could teach us the game in the sack.
06:37Is there extra pressure coming on state schools because of the VAT imposition on private schools,
06:44for instance?
06:47Well, it's happening in a very particular way. In some areas, you see more competition for
06:53the best schools, and so more people are not getting the choice of school that they wanted. But there's a
06:58particular problem about special needs because a lot of parents who have children with special needs
07:04don't go away and get what used to be called a statement, which is now called an ECHP,
07:09because they are happy that in the independent sector their children can get the help that they
07:14need. But when they then are forced to move into the state sector, they will go and get an ECHP,
07:19they will go and get that additional resources for children with special needs. And the system is
07:24already heavily loaded by an explosive growth in the numbers of children with special needs.
07:28And so that will cause real pressure for councils in areas where significant numbers of children
07:33move. And we're now seeing three or four times as many children moving from the independent
07:37sector to the state sector as the government predicted. It's very early days, it's very early
07:41days in this process, but the numbers are coming in a lot higher than the government expected,
07:45and that could become a real problem.
07:46What could be a real problem for you is this damning new poll out this week, this YouGov poll,
07:51I'm sure you've seen it. Reform on 29%, Labour second at 22%, Lib Dems in at third,
07:59you in at fourth at 16%. You haven't polled this badly since just before you ditched your leader,
08:07Theresa May. So does Kemi Badenoch need to be replaced? I mean, even the Prime Minister said
08:12on Monday that it's reform, who are his main rivals for power now. The Conservatives are no longer
08:19the main opposition. Well, he would say that he's trying to stir the pot. Obviously, there are
08:26121 of us. There's a handful of reform MPs. We've obviously got to raise our game. We've got to do
08:31better. But the truth is that Starmer's government is running this country into the ground. You've got
08:3530% more people coming across the channel after his promise to smash the gangs. Actually, the gangs are
08:40smashing him. You have the economy slumping, Rachel Reeves casting around for even more
08:45tax increases. You have the junior doctors once again threatening to go on strike. And you have
08:51across the country schools sacking good teachers, something that people who voted Labour would have
08:56been stunned to discover was going to happen less than a year after they came into the government
09:00because of their tax increases. So I think that over time, the damage that the Islamic government
09:06is doing will become more and more apparent and more and more people will call this a problem.
09:10And realistically, the alternative is going to be us rather than some other party. And we are much
09:16larger. I've been through this situation before. You always hear these moments. I mean, indeed,
09:21at one point, Keir Starmer was said to be on his way out. And then he's ended up being prime minister.
09:25So yes, someone, of course, has to do better. But we've got to get across the message that the
09:30Starmer government is a disaster. And only realistically, we can provide an alternative to that
09:36disastrous government and end the mass immigration, end the economic stagnation, and end the problems
09:41in our public services. Shadow Education Minister Neil O'Brien, thanks for your time.