Labour must improve lives by time it leaves office, says Reeves

If children from “ordinary backgrounds” are not living “more fulfilled lives” by the time Labour leaves office, it will be “time for somebody else to take over”, the Chancellor has said.

Speaking to the Global Progress Action Summit in London, Rachel Reeves acknowledged people were “unhappy” at the state of the economy.

But she also mounted a strident defence of her economic policy, arguing there were “trade offs” between taxation, spending and debt and saying there was “nothing progressive about seeing interest rates go up again”.

She said: “No-one can accuse me of not accepting that there are trade-offs.

“That’s why there are people who are unhappy.

“But if you pretend there aren’t trade-offs, then we’re going to go the way that Liz Truss went.”

She added: “In the end, what matters is at the end of our time in office, however long we’re in our jobs, at the end of it, can we say that kids from ordinary backgrounds are living richer and more fulfilled lives than we came into office?

“If you can say yes, you’ve done a good job, and if no, it’s probably about time for someone else to take over.”

Ms Reeves’s comments come ahead of Labour’s annual conference next week, which is expected to see increasing pressure for ministers to abolish the two-child benefit cap.

Both candidates for Labour’s deputy leadership have signalled their opposition to the cap, while the Prime Minister has not ruled out scrapping it.

But on Friday the Chancellor warned of “trade-offs between tax and spending”, including welfare spending.

She said: “If we’re going to spend more on that thing, then that means less to spend somewhere else, or it means higher taxes.

“So, there’s no getting away from that.”

Ms Reeves also firmly pushed back on suggestions she should loosen her fiscal rules or increase taxes to respond to a changing world, saying: “In those tough times, it’s even more important we have somebody who’s got a grip, has a plan and is not willing to be dragged off course by every siren call.”

And she dismissed proposals put forward by other parties, saying “I’m not sure I’d call them plans” and describing suggestions that ending immigration would solve Britain’s problems as “simplistic and wrong”.