SHADOW Chancellor Mel Stride said today’s inflation figures are worse than presented and warned that the government will create an economic “doom loop” if it puts up taxes in the autumn.
He told GB News: “It’s getting really bad. And in fact, those figures are a little bit worse than you present it, because what has just happened is the figure for April has been revised down to 3.4%, so it stayed at the same level.
“It hasn’t come off a little bit, it’s sustained at the same level for April and May. It’s increasing costs for people up and down the country, and it’s all down to this government. They put taxes up, National Insurance costs up.
“Some of that got passed on by way of higher prices, because that’s what employers typically do in that situation. And they’ve taxed and borrowed and spent a huge amount of money that has also increased inflation. That’s meant higher interest rates for longer as well, hitting people with their mortgages too.”
He added: “So this idea of fiscal headroom, as economists call it, is basically the buffer that you deal with if things get worse than you expected. That buffer that she [Rachel Reeves] had from the budget back in the autumn of last year, she blew it entirely and more.
“She rebuilt it in the spring, but most economists are expecting that to have evaporated come the Budget in the autumn. What we’re probably looking at in the autumn, I’m afraid, is tax rises, which gets you into this kind of doom loop.
“Because taxes are going up, the economy is slowing. Your headroom is disappearing. You go for more taxes, it slows the economy even more. And that’s the vicious cycle.”
Asked about Labour being in third place in a new opinion poll, he said: “Most people look at this Labour government, they see prices going up, they see unemployment going up, which has gone up by 10%. They see growth slowing.
“I do think they look at Reform and they question their numbers, and they say, ‘look, do these various promises actually add up what?’ We’ve got to be, as the Conservative Party, the grown-ups in the room, as you term it, the people that are going to be fiscally responsible and get back to the sound management of our public finances.”
On immigration, he said: “I think what’s getting lost in all the shouting matches are the facts, and the fact of the matter is that net migration and illegal migration were not where they should have been when we left office, and we put our hands up to that. But this government is making it even worse.
“If you look at the number of illegal migrants coming across the short Dover straits, that’s actually worse compared to when the last year that we were in office…when it comes to the grooming gangs and a national inquiry that we’ve now pushed for on successfully, got the government to U-turn on, this is something that’s been exacerbating that.
“And of course, Angela Rayner was denying that there was any problem that they were failing to resolve. The key to it is deterrence. If you can have a strong deterrent there, such that when people come over here illegally, they are promptly put on an airplane and taken somewhere else, then they stop coming.
“We got close to that with the Rwanda deal, which, of course, this government scrapped almost on day one, when they came into office.”
Asked about figures indicating that one third of sex crimes are being committed by foreign nationals, he said: “We definitely need to get well away from this position that we fell into, which Labour exacerbated by saying that by asking for this kind of information, by making observations about people’s heritage and crime, you are somehow jumping on some far-right bandwagon.
“This is dog whistle politics. That’s how they tried to frame it. And we’ve got to get well away from that. We need to know what the truth is. This is what this national inquiry must now expose, and that those that have been involved with this need to be brought to justice.”
