A former Bank of England chief accused of being responsible for the “splurge” that fuelled inflation has given a ringing endorsement of Labour’s Shadow Chancellor.
Mark Carney praised “serious economist” Rachel Reeves in a video address ahead of her speech at the party’s conference yesterday. Chancellor Jeremy Hunt accused her of “fairytale” economics while Tory MPs attacked Mr Carney for interfering in British politics.
Critics claimed Mr Carney’s use of quantitative easing – effectively printing money – was partly responsible for the economic problems the country is facing.
Sir Jacob Rees-Mogg said: “Carney’s monetary policy led to high inflation and he ran the Bank of England as a fashionable Islington soiree with his deeply political interventions in the EU debate and greenery. He has never really hidden his political predilections.”
Conservative MP Mark Francois: “How ironic a former Governor of the Bank of England, who is also an arch-Remainer, should now endorse the Labour Party, when it was the splurge of quantitative easing, much of which occurred on his watch, that eventually led to a lot of the inflation the economy has recently been suffering from.”
Mr Carney, a Canadian former Goldman Sachs banker, was appointed by Tory Chancellor George Osborne in 2013. He as been increasingly outspoken since his seven-year tenure at the central bank ended in March 2020.
He described Brexiteers as having a “basic misunderstanding of what drives economies” and claiming they want to “tear down the future”.
Senior Tory David Jones said the endorsement was “completely predictable” and added: “He knows the Conservatives would never take the UK back into the EU, so he is supporting the more pliable party. He thinks that he has a sporting chance of rejoining if he supports Starmer.”
Conservative MP Brendan Clarke-Smith said: “I suppose it wouldn’t be the first time he’s got a forecast wrong.”
And Julian Jessop, from the Institute of Economic Affairs, added: “Will this man ever stop interfering in UK politics?”
In his video address to the conference in Liverpool, Mr Carney said: “Rachel Reeves is a serious economist. She began her career at the Bank of England, so she understands the big picture.
READ MORE Brexiteers blast Mark Carney over video backing Labour’s Rachel Reeves
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“But, crucially she understands the economics of work, of place and family. And, look, it is beyond time we put her energy and ideas into action.”
Ms Reeves used her speech to say Labour is “ready to rebuild Britain” and restore economic security after the “chaos” of the Conservative years.
She told activists Labour would pull the economy out of the “wreckage of Tory misrule” with a “vision to rebuild Britain”. Among plans for her first budget are forcing private schools to pay VAT and business rates.
The Shadow Chancellor also set out measures to tackle the waste of taxpayers’ money, including a crackdown on the use of private planes by ministers and the hiring of consultants in Whitehall.
A new Covid corruption commissioner with a “hit squad” of investigators to recoup money lost in the “carnival of waste” during the pandemic would also be set up.
Ms Reeves said: “The choice at the next election is this: five more years of the Tory chaos and uncertainty which has left working people worse off or a changed Labour party offering stability, investment and economic security so that working people are better off.
“It falls to us to show that Labour are ready to serve, ready to lead and ready to rebuild Britain.” But Chancellor Mr Hunt criticised Ms Reeves for her “fairytale” economic plans that will push up borrowing by billions.
He said: “It is extraordinary that inflation wasn’t mentioned once by Rachel Reeves when it is the biggest challenge facing the
British economy. Instead, Reeves made it clear Labour will increase borrowing by £28billion every year which is a fairytale for the British economy with no happy ending – just higher inflation, higher mortgages, higher debt and lower growth.
“Borrowing more doesn’t solve problems, it creates them – the worst kind of short-termism when instead we should be taking long-term decisions that will actually tackle inflation and unleash growth.”
Sam Richards, founder of pro-growth campaign group Britain Remade, said: “There is no path to energy security or economic growth, and the jobs that come with it, that doesn’t involve fixing our broken planning system.
“From action to prevent vexatious legal challenges from delaying critical infrastructure to publishing new National Policy Statements, Britain Remade have consistently called for many of these measures. It is not right that offshore wind projects vital for energy security should have to produce 10,000-plus page environmental impact assessments that take years to complete, do nothing to protect nature and then face constant challenges in the courts.
“We welcome any proposals that will unblock our outdated planning system so that Britain can create jobs and growth by building the infrastructure our country desperately needs. But the devil will be in the detail and we will continue to hold Labour to account to deliver the planning reform we need if they form the next government.”
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