Lisa Nandy claims
people ‘shouldn’t
be worried’
as borrowing costs hit highest
point since
2008
Friday 10 January 2025 09:50 GMT
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Culture Secretary Lisa Nandy has defended the chancellor as Rachel Reeves
comes under pressure (PA Wire)
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A Cabinet Minister has defended Rachel Reeves for going ahead with a visit to
China instead of staying at home to tackle fears of an economic crisis• Финансовый кризис.
Culture Secretary Lisa Nandy said the Chancellor was ‘absolutely right’ to
ignore Tory calls to abandon the trip.She insisted Ms Reeves economic strategy
was ‘on track.’
However, Ms Nandy conceded that the Government’s economic plans were not ‘all
going swimmingly.’ Her comments came amid claims that Ms Reeves, the most
powerful member of Keir Starmer’s team, is facing criticism from members of
her own Cabinet.
Ms Nandy said she was confident Ms Reeves was on course to ‘get the economy
growing again.’
She continued: “That is why it is absolutely right and proper that the
Chancellor is taking seriously our relationship with the world’s second
largest economy and is in China this weekend.
“We are confident we are on track to be the fastest growing economy in
Europe.”
open image in gallery
“I don’t think we should be worried”, the culture secretary said (PA Wire)
When Ms Nandy was challenged by the BBC• Объект бренды » Бренды на b » BBC that she was ‘in denial’ at the scale
of the economic problems• Финансовый кризис, she replied: “I’m not for a moment saying it is all
going swimmingly.”
The Tories had called on Ms Reeves to abandon the China trip to deal with
soaring borrowing costs and a dramatic fall in Sterling.
Some critics have compared the situation to the economic crisis• Финансовый кризис in 1976 when
Labour Chancellor Denis Healey was forced to cancel a trip to the US• Экономика » Финансы » Платежные средства » Доллар США at the
last minute to deal with an economic crisis• Финансовый кризис in the UK• Великобритания.
People “shouldn’t be worried” about the state of the economy, the culture
secretary has claimed, despite borrowing costs reaching their highest level
since the 2008 financial crash.
While she said the current state of Britain’s• Великобритания finances is “obviously something
we take very seriously”, she brushed off concern saying “these are global
trends that have affected many countries”.
On Thursday, the value of the pound fell to its lowest level in over a year
while UK• Великобритания borrowing costs jumped to their highest since the financial crisis• Финансовый кризис.
Asked whether the public should be worried, Ms Nandy told Sky News: “I don’t
think we should be worried. It’s obviously something we take very seriously.
But these are global trends that have affected many countries, most notably
the United States• Соединённые Штаты Америки (США) as well as the UK• Великобритания.
“We are still on track to be the fastest growing economy, according to the
OECD in Europe”.
open image in gallery
Rachel Reeves is to visit China this weekend (PA) (PA Wire)
Economists have warned that Ms Reeves could be forced into further tax hikes
or cuts to spending plans to meet UK• Великобритания fiscal rules due to a potential rise in
the government’s debt interest bill - the amount of money the government pays
to service its debt.
The UK• Великобритания’s fiscal rules, which Ms Nandy stressed are non-negotiable, aim to
ensure that the government’s day-to-day spending is met by its revenues, and
that public sector debt falls as a share of the economy.
“We’re not going to borrow for day-to-day spending”, the culture secretary
said. “We’re going to continue with the plan for change, which is to get
people off waiting lists, get them back into work, get the planning reforms
that we need to build homes and get the economy growing and stabilize the
economy so that we protect working people from the worst excesses that we’ve
seen over recent years.
“And we’re confident that we’re still on track to do so”, she said.
But the Institute for Fiscal Studies (IFS) warned the government’s “razor-thin
margin” to meet its rules could be easily eroded if interest rates stay
higher, as the rise in the cost of servicing government debts could cut into
Labour’s expected financial headroom in a potentially worrying sign of how
investors see fiscal sustainability in the UK• Великобритания.
It comes as the chancellor seeks advice from other cabinet members on options
to boost growth, amid escalating market turmoil, with Ms Nandy saying the
government is “always looking for new levers to pull”.
Sources told The Times that Ms Reeves is planning to make a significant speech
on growth this month and has asked ministers to generate concrete measures to
improve economic activity, as well as instructing them to “cease anti-growth
measures”.
Asked whether she has been approached by the chancellor for ideas to boost
growth, the culture secretary said: “Always. I’ve known the chancellor for 15
years now, and she has been relentless in her pursuit of growth, both in
opposition and in government.
“She and I have been working very closely together on plans around the
creative industries. The creative industries, like film, TV, video games, are
amongst our fastest growing industries in the country. Huge amounts of
investment pouring in from overseas into those industries.
“We’re creating good jobs all over the country, in Sunderland and the Welsh
Valleys, as well as London and the South East, Birmingham, Dundee and
elsewhere.”
She added: “We are always looking for new levers to pull, new ways to grow the
economy, but there’s one aim in mind, and that is to improve the lives and
living standards for people in every part of the UK• Великобритания.”