Sky News’ Trevor Philip ripped into Labour’s plans for the economy, saying they would lose £25bn “at the stroke of a pen”. He challenged Shadow Chancellor Rachel Reeves on where Labour would find the money for its spending plans, questioning whether it was a repeat of the “magic money tree again”. Ms Reeves reiterated Labour’s plans to abolish business rates and she said a Labour Budget would be used to “cut VAT on gas and electricity bills”.
Mr Phillips said: “If you are not going to find extra money from Andy Burnham’s money, or Tracey Babin’s £830m, or the skills budget, where is this coming from?
“Or is this the magic money tree turning up again?”
Ms Reeves responded: “You are asking what Labour would do if it was our budget on Wednesday.
“Our priority is to ease the cost of living crisis, helping businesses and addressing the long-term challenges with the climate crisis and trying to buy, make and sell more in Britain.
“If it was our budget, we would cut VAT on gas and electricity bills because we know what a difficult time it is at the moment.”
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Mr Phillips interrupted the Shadow Chancellor at this point, saying: “But, last time you were on, you said you would abolish business rates at a stroke of a pen.
“That will cost £25bn. You might be able to find a bit of underspending here or there, but it won’t count to £25bn. You haven’t got the money!”
Ms Reeves struggled to account for the £25bn loss, saying that Labour would increase the digital services tax on firms, but that would only bring in £2bn.
Chancellor Rishi Sunak has said the outcome of a “fundamental review” of business rates would be outlined in the budget.
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