Labour’s decisions are hitting the country hard.
Taxes are at a record high, the cost of borrowing is rising, and sickness and disability welfare spending is set to reach £100 BILLION by 2030.
This isn’t sustainable.
The Conservative Party will always work in the national interest. Which is why Kemi has offered to meet with Keir Starmer, Rachel Reeves and the new Welfare Secretary to agree a way to bring down welfare spending.
Labour have a choice. They can hike up taxes and borrow more, or work with us and do the right thing.
Watch Kemi’s Speech here 👇
You can read the full transcript here 👇
Thank you Alan for that wonderful introduction.
And I want to thank every single person in the audience for making the effort to come despite the tube strike.
I’m sure it was a real mission to get here, it was for me it took me two hours and fifteen minutes.
But I am glad I chose this venue, and I chose it for a very simple reason.
No one understands the need to live within your means better than accountants.
You are the people who spot the problem before the bill arrives. You know the difference between a plan and a promise. And unlike most politicians, you actually believe numbers should add up.
The rules of economics are stubborn. And if you ignore them, they have a way of catching up with you.
No one knows better than accountants that you cannot spend what you do not have.
And that is why I am here today.
We are living beyond our means.
We are spending more than we earn,
On welfare, on union pay rises, and increasingly, on debt interest.
Alongside record levels of taxation, this Government is borrowing more and more money and our national credit card is close to maxed out.
The markets are starting to worry but rather than focus on these serious economic challenges facing our country, Labour are too busy blaming the last government for problems of their own making.
They are finding governing harder than they thought, I could have told them that.
Last week Keir Starmer launched Phase Two. Phase Two didn’t even last three days.
The Deputy Prime Minister is gone, after trying to avoid the very same taxes the Chancellor wants to put up.
They’ve just had a huge reshuffle but it is born not of strength, but a political crisis where the person who has caused the country the most grief, the Chancellor, is still in post.
She has already put up taxes by about £40 billion – that is the biggest tax raid this country has ever seen.
And in the next five years, she will double the deficit.
This combination of record taxes and rampant borrowing can only mean one thing. That she has totally lost control of spending.
And investors can see it.
I warned this summer that we could face a bond crisis if we carry on like this.
And this autumn, like a risky customer, the markets are charging us more to borrow than at any point in the last 27 years.
This isn’t our destiny, it is happening, because of the terrible decisions Rachel Reeves has made.
And unsurprisingly, her figures now aren’t adding up.
And the solution, she seems to think, is yet another round of taxing and another round of borrowing.
But that will just cement what I call the tax doom loop which she created.
The thing that she and Keir Starmer are missing is plain to everyone else, including and especially to people in this room.
Because every family, every business, every charity - knows what it means to live within your means.
And if you don’t pay your bills, you will go bankrupt.
If you max out your credit card and the late notice charges start piling up, there’s only one answer, cut your spending.
This is a fact of life we all have to live by.
Ends must meet.
And if they do not, there will be consequences.
But this Labour Government is behaving as if the rules don’t apply to them, because they think they’re nice people.
They are making no real effort to live within their means, because they’re worried, living within their means doesn’t look “nice”.
So instead, they are leading Britain into a deeper and deeper crisis, because of their pride.
And I don’t think that people have realised yet just how bad this mess is.
Our children will someday have to pay back the debt that Rachel Reeves is now taking on.
They will grow up in an uncertain world.
Enter a job market fundamentally changed by AI.
Compete with talent and capital in growing economies around the world.
They will pay for our health and social care, for the pensions we draw, for the services we need.
And on top of all of that, they are going to be saddled with paying for Rachel Reeves’s wasteful borrowing.
That is not fair.
She promised to stick to the fiscal rules that she inherited, and she broke that promise at the earliest opportunity to go on her borrowing spree.
And what did she spend it on?
Inflation busting pay rises for the unions, the same unions that are going on strike right now, spent that money on Ed Miliband’s pet energy company, which won't produce a single watt of power, and a bill for sickness benefits that are spiralling out of control.
Our children will be paying for all of this with interest on top, compounded over decades.
They may end up borrowing, to pay off the interest on this borrowing.
This is like taking a credit card out to pay off another credit card.
Nobody in the real world thinks that this is sustainable
There is a hard truth that we must face up to in this country.
That we must be brave enough to confront.
Britain’s standard of living is not an entitlement, it is the sum of our collective efforts.
There is no guarantee that we will enjoy a particular quality of life just because we are the United Kingdom,
If we want it, we have to earn it. If we want to stay wealthy, we have to produce wealth, we cannot print it.
And those politicians spending money on things we cannot afford, or making promises they can’t pay for, are misleading you, they are fooling you, and your children, my children, our children will pay the bill.
The Conservative Party is the only Party that is talking about this, we seem to be the only party that understands this.
And under my leadership we will continue to tell these simple economic truths.
Back in 2010 we inherited from the Labour Party a deficit never seen before in peacetime history.
Gordon Brown had not fixed the roof while the sun was shining, so when the financial crisis came we were exposed.
The state was borrowing £1 of every £4 it spent.
And it was The Conservatives - as usual - who were elected to clean up an economic mess.
We came into office with a clear plan.
We were honest with the public about what needed to be done before the election.
We took difficult decisions and Labour hated and voted against each one.
But we reformed welfare, so millions more got into work
And we brought down the deficit every single year until the pandemic.
And I’m not saying we did everything we did was perfect, because if it was, we would be in government. That’s a fact.
But we did make some hard decisions.
When a storm came, a once-in-a-century pandemic we could act.
We saved jobs, protected livelihoods and kept businesses afloat.
We got the country through it.
But the pandemic is now over.
Yet this Government is borrowing for day-to-day spending, for welfare and for public sector salaries.
Their only money saving idea, the Office for Value for Money is being closed down because it cost the taxpayer £1.6 million. This is not serious.
The problem is that the more Rachel Reeves taxes us and the more she borrows, the less we will grow.
She put up Employers’ National Insurance, we warned them this was a tax on jobs so it proved to be. Unemployment has risen every month bar one, since Labour won the election.
Those numbers aren’t just statistics, each one a career terminated, a service never rendered, a family with plans ruined, a household in hardship.
And what no one ever sees, is the jobs that weren’t created as a result of these taxes or the young people who didn’t get their first break.
And to cap it all off the Government have let the trade unions dictate a raft of new burdensome red tape. They are right now pushing through an Employment Bill that increases trade union power and guarantees more strikes like the ones crippling London today.
That bill will destroy probation periods as we know them and bring in Day 1 rights that put young people, and people coming off benefits, at a disadvantage.
And in a move we’ve never seen before, all five of the major business groups have come out against these new regulations.
Angela Rayner was the champion of this war on enterprise, but now that she’s gone, I say it’s time for the Government to drop this bill and go for growth.
But what does that mean? That means backing business not taxing business.
Better, limited regulation, controlled, lower taxation, cheaper, abundant energy – these are the essential ingredients for growth.
Everything this government is doing is making life more expensive for all of us.
After just one year of Labour in office taxes and bills have gone up by up to £1,700 for some families.
After her Budget last year, the Chancellor promised that she wouldn’t be back for more taxes, but we know she will be.
All summer there’s been speculation and briefing about an endless series of tax rises.
Because that budget last year hammered growth, firms stopped hiring, people lost their jobs and hundreds of thousands more are on welfare.
And with a series of unfunded U-turns demanded by Labour backbenchers, and granted by a Prime Minister too scared to face them down, she’s got a multi-billion-pound black hole in her figures.
So, what’s her plan? She’s going to tax us more.
She is in the Treasury right now, I’m sure, with officials. I’m a former Treasury Minister, I know how it works. She’ll be desperately making plans for anything she can lay her hands on.
She will be looking at hiking taxes on our homes, wages, and pensions.
Every single one of us will be paying a Reeves penalty this winter.
This is the tax doom loop.
The fundamental problem is our economy is being run by people who think it is government that creates growth. It’s not. It’s business that creates growth.
We know that you cannot tax your way to growth.
But if they cannot create growth, then at the very least they have a duty to ensure we live within our means and only spend what we earn.
We all have to accept that Government cannot do everything.
The difficult choices
There is another way.
We need to have difficult conversations not just about what government can do, but about what it cannot do.
State spending is nearly half of GDP.
Nobody sensible thinks that’s sustainable.
The choice at the next election
But as usual, the Conservatives are the only party really making this case.
We are the only party fighting to protect the money you earn
We are the only party arguing that the Government has to live within its means.
Every single other political party in Parliament today, every single other one, wants to increase welfare spending and they voted to do so.
They wanted to lift the so-called two child benefit cap.
They don’t mind that our sickness benefits bill alone is on course to reach £100 billion by 2030.
There are some in Government that must know that things need to change.
You can picture their grim faces, looking at the latest OBR figures.
But the truth is they came into Government with no real plans for how to save money – only how to spend it. That’s why they are in trouble.
That’s why today I’m making the Prime Minister a serious offer.
Because the Conservative Party will always act in the national interest.
If he is serious about cutting spending, and really bringing down the welfare bill, we will help him.
The last time he tried this in July, the Prime Minister was humiliated by his own backbenches.
He had to gut a bill just 90 minutes before MPs were due to vote on it.
And created a £5 billion hole in the Chancellor’s finances.
After his unexpected reshuffle last week, he now has a new Welfare Secretary, a new Chief Whip, and a new opportunity.
The papers say he is gearing up for another go at welfare savings.
But the backbenchers who blocked him last time haven’t gone away.
Even with a 170-seat majority, the Prime Minister is weak.
Right at this moment, his Party is gearing up to elect a Deputy from the left of Labour.
A deputy who will do everything they can to frustrate the changes our country so desperately needs.
So, whether he wants to admit it or not, Keir Starmer needs our help.
If he wants to cut spending, and stop this tax doom loop that he has created.
If he wants to stop pushing up inflation, and stop crushing business confidence, he simply cannot afford to fail at this again.
We cannot afford for him to fail again.
And so, the Shadow Chancellor, Shadow Welfare Secretary and I are making him a clear offer.
Sit down with us.
Let’s agree a way to bring welfare spending down.
And I will offer him the support of the Conservative Party.
This isn't a blank cheque.
But I can say this, if we agree to something, we will vote for it in Parliament on a three-line whip.
There will always be some people who need support, and the Conservatives will make sure they get it.
But the current system is out of control, and it threatens all the good it was designed to do.
This is an offer to work together in the national interest to find common ground and get a serious plan.
The country knows that it’s the right thing to do.
Keir Starmer and Rachel Reeves have a choice.
They can bow down to their left-wing Labour MPs again.
They can hike up taxes and borrow more.
And risk our economic future.
Or for once, they can do the right thing.
I hope the Prime Minister will put our country before his party and agree to work across the aisle on this.
He knows that it’s the right thing to do.
