Presenter Trevor Phillips compared Rachel Reeves to Liz Truss today after her recent decisions on non-doms and benefits during a scathing interview.
The chancellor watered down plans to make wealthy foreigners pay more tax on their overseas earnings this week, despite previously promising to crack down on this “non-dom” loophole.
She has also promised to crack down on benefit fraud this week.
So the Sky News host put a quote to her, which read: “We must break down the barriers to growth built up in our system over decades.
“Decisions take too long, Burdens on business are too high.
“Infrastructure projects get delayed for years, and years and years. As a result, we have seen economic growth choked off.”
“What you’ve been saying this morning sounds very like that,” Phillips said – before revealing it was a comment from former PM Truss, who famously crashed the economy in 2022 with £45bn of unfunded tax cuts.
But Reeves said Truss and other Tory PMs “did not do the practical things which were necessary to grow our economy”.
Phillips’ remark came after he called out Reeves for going to “Davos, the capitalist shin-wag” and listening to “millionaires” by changing her promise to close the non-dom tax loophole.
The chancellor just replied that if you make Britain your home, you should pay your taxes here, “and under Labour you will”.
But Phillips pointed out that she has changed the amount of money she was going to charge non-doms.
However, Reeves argued she was only changing the scheme so non-doms have to pay lower rates of tax on the overseas income for the next three years.
“What we are doing is making it easier for people to bring money in from overseas to the UK, without facing punitive tax rates,” she said, saying Labour are still removing the non-dom status from the UK tax system.
Phillips said he was not “nit-picking,” and pointed out that Reeves imposed a £40bn of tax hikes with her autumn Budget, reduced the winter fuel allowance for pensioners and reduced inheritance tax relief for farmers.
He said: “You can see that this week, people watching you in Davos amongst all these millionaires, and you saying, ‘well I’ve listened to this community’, are wondering why you can’t listen to the farmers.”
Reeves replied she had to raise significant funds in the Budget and “people would never forgive me if we lost control of public finances in the way that Liz Truss did”.
Reeves also added that her non-dom changes had not cost the public anything.
But Phillips said it seemed as though “non-doms get sympathy and people on welfare get tough love.”
Reeves just said it was about tackling fraud, “If people aren’t entitled to benefits, they shouldn’t be getting them.”
Phillips also skewered the chancellor over her attempt to be more positive with the UK, following months of pessimism over the state of the British finances.
He said: “When you said we needed to be more positive with our outlook, more like Donald Trump, did you forget that America’s GDP was growing at the end of last year while ours was just flat? He’s got something to boast about.”
Reeves said the UK has “loads” to boast about, although she admitted we have not had 3% growth “for a long time”.
“We need to go further and faster in delivering that growth, exploring the massive opportunities that we have as a country,” she said, saying everyone needs to “be championing Britain”.
Phillips hit back: “In the autumn, you and the prime minister were channelling Eeyore. How come Tigger has suddenly turned up, what’s changed?”
Reeves deflected and just said the IMF revised up the predictions for the UK economy, to become the “fastest growing major economy in Europe”.