Rachel Reeves's economic decisions will keep interest rates 'higher for longer', Mel Stride says

GB News

Shadow Chancellor Mel Stride has accused Rachel Reeves of making the "wrong decisions" on the economy, warning they will keep "interest rates higher for longer".Stride told GB News that inflation remains "too high" due to the Government's approach, as official figures show rates increased to 3.6 per cent in June.FULL STORY HERE.

Transcript

00:00The Shadow Chancellor, Mel Stride, who joins us now from central London.

00:05Mel, good morning to you. Big morning, things happening fast.

00:09Just got those inflation figures, don't know if you've heard them, up gentle rise of 0.2%.

00:15So inflation very slow, gives us an overall total of 3.6.

00:21What's your take on that?

00:24Well, it's too high, Eamon, and the reason it's too high,

00:27and remember it was about half that under the last government,

00:31we got it down to about 2%, well, bang on 2%,

00:33is that the government's been out there borrowing and spending vast amounts of money,

00:37and that has been stoking inflation.

00:39And, of course, what that means is interest rates being higher for longer,

00:43which is obviously going to be felt through people's mortgages, business, borrowing costs,

00:47and also the servicing costs of our national debt that this government is ever adding to,

00:52which is running at about £100 billion a year, which is twice what we spend on defence.

00:56So the wrong economic decisions leading to higher inflation, I'm afraid.

01:01Listening to the Chancellor's speech at the Manchin House last night,

01:06she was basically saying, let's do away with this cautiousness, let's be bold,

01:11let's get out there, let's be more strident with lending rules, not as hemmed in by them.

01:18Yeah, I think there's something to be said for that.

01:23I think there has been a kind of excessively cautious culture amongst some of the regulators,

01:30and we need to get back to the basics of regulation not getting in the way of growth

01:35and making sure regulators do whatever they can to facilitate growth,

01:40as well, of course, of protecting the financial system and consumers as well.

01:44But we need to get that balance right.

01:46But what I would say with the Chancellor is it's all very well to stand up in the Manchin House

01:50and say that, whilst at the same time, of course, she's put us in a position

01:54where we now have very poor and weak public finances,

01:59and we've got a summer of absolute uncertainty approaching this coming budget

02:04as to whether taxes are going to be going up, and I think we all know that they will be,

02:08and who's going to be paying the bill.

02:10That is not an environment in which growth occurs, I'm afraid.

02:14Well, they would argue that you left them a £22 billion black hole,

02:17that I think they've actually made bigger.

02:20But they would argue that, and some of these measures have to be put in place.

02:25So that's kind of why she's doing the thing.

02:27For example, the national insurance hike on employers.

02:30Well, no, no, no, I disagree with that.

02:35The £22 billion black hole, the Office for Budget Responsibility,

02:39that's the independent forecaster, has completely debunked that number.

02:44It's just completely erroneous.

02:47The only black hole that has actually been created is the one that this government created

02:51when it stripped out all the savings from welfare that it was trying to get through the Commons.

02:56That was a £5 billion cost there, and the U-turn that they did on the winter fuel means testing.

03:03That means they are sitting there with a £6 billion black hole as they go into the budget in the autumn.

03:08And this is one of the factors, as well as mismanaging the economy so we've got low growth,

03:13that are going to lead to those tax increases in the autumn.

03:16And that, of course, is going to weigh still further on consumers

03:20and hard-pressed people up and down the country, and businesses as well.

03:23Mel, could I draw your attention to this big story today about the migrant, the Afghan migrant cover-up?

03:33You know, we talk about costs and spending, and this could cost the country £7 billion.

03:39And the embargo was put under your government?

03:41Well, so we don't actually know the kind of figures here.

03:47I mean, there are all sorts of numbers, everything for about £800 million upwards.

03:50But, look, I think the principle here is an important one, and that is that when this data was leaked,

03:55which was a terrible error on the part of the Ministry of Defence and should never, ever happen again.

04:01It's extraordinary. It happened in the first place.

04:03But it did place at risk tens of thousands of Afghans who had, in many cases, bravely assisted us

04:09when we were involved in Afghanistan and whose lives would be put in danger as a consequence of this data being out there.

04:16And that's why this super injunction was brought in. It was continued by the current government as well.

04:22And I think, in principle, that was the right approach.

04:25But, of course, there will be many questions, quite rightly now, around this,

04:28and that's where Parliament will now play a full part, including the Defence Select Committee,

04:33which no doubt will be launching an inquiry fairly shortly, I would have thought.

04:36Do you think it was right to lift the super injunction?

04:41Well, those are judgments to be taken by the government.

04:46They did have a review from a former deputy head of our security services

04:52into what the current situation is, the risk and so on.

04:57And they clearly came to the decision that now was the time to remove that.

05:01I don't know the details around that particular judgment,

05:04but clearly that would have been looked at very carefully.

05:07I was going to ask you, though, back to the economy.

05:09If you were in power now, what would you be doing differently to Rachel Reeves?

05:15Gosh. Well, no, no, that is an extraordinary question.

05:18That is a great question.

05:20I think it's like saying, though, look, if somebody's driven a car into a brick wall at 100 miles an hour,

05:24look, Mel, take the steering wheel and tell us how you'll get out of that.

05:28I wouldn't have got where we are in the first place.

05:30And there are three principal things I would have done differently.

05:33One is on the tax and spending side, I would not have been borrowing vast sums of money

05:38and I would certainly not have been taxing business

05:40because that's part of the reason why economic growth has been very, very anemic.

05:45Secondly, on productivity, that's output per worker.

05:48I wouldn't have been going in and giving 14% pay rises to train drivers,

05:5222% to the junior doctors with no strings attached,

05:55no requirement for greater efficiencies.

05:57And the third thing is welfare.

05:59We had shown in government that we can make serious savings from the welfare bill,

06:03£5 billion due to reforms that I put through.

06:05We had further plans to bring the welfare bill back under control.

06:10And if they had done those three things,

06:13we would be in a very different position now.

06:15Shadow Chancellor, thank you for your time this morning.

06:18Always appreciated. Good to talk to you.

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