Labour will prioritise faculties and tax cuts if financial system improves, Reeves hints

Ploughing cash into education and cutting taxes will be among Labour’s highest priorities if the economy improves, Rachel Reeves has hinted.

Quizzed what things topped her wishlist if she can loosen the purse strings, the Shadow Chancellor said she doesn’t want youngsters learning in prefab huts like she had to. And Ms Reeves added that cutting taxes is high on her agenda.

It comes as pressure mounts on Labour over its refusal to scrap the two-child benefit cap, which economists say would lift 500,000 kids out of poverty. Keir Starmer refused to say whether scrapping it was part of his five-year plan.

Asked what her priorities would be if she had more money to spend, Ms Reeves told The Mirror: “We are determined to grow the economy so that we can improve living standards and have the money to invest in our public services.

“After 14 years of austerity and cuts to public services there is certainly going to be demands for that.” She went on: “You know, my passion is education. When I was at school, we had a couple of prefab huts in the playgrounds as our Sixth Form.

“And, I want to make sure that all children leave school, college and university with the skills they need to succeed in life. That’s something that I care passionately about. But we also want to bring down taxes on working people.

“So as we grow the economy, we would have more money for our public services and also to get taxes down on working people.”

Pressed about the two-child benefit cap – introduced by former Tory Chancellor George Osborne – and whether he’d abolish it if he becomes PM, Mr Starmer said: “I’m not going to now speculate as to what happens if conditions change. We are going into this election with a plan that’s fully costed, fully funded without the need to raise taxes over about those we specifically set out.

“I’m going to stick with that plan because we think stabilising the economy is the central most important issue facing the country. But it doesn’t mean we won’t have a child poverty strategy. We certainly will. ”

The policy restricts most low-income families to claiming Universal Credit and child tax credit for their first two children. Families lose out on £3,455 per year per child after that, according to the Institute for Fiscal Studies (IFS). Half (50%) of families impacted by the cap in 2023 were single parents, and 57% had at least one adult in paid work.

New IFS analysis found a further 670,000 children will be affected by the policy by the end of 2029. The policy only applies to children born after 5 April 2017, so the number of children affected is growing every year. Currently, it affects around 2 million children; this will rise by 250,000 next year and by 670,000 before the end of the next parliament, according to the IFS.

He made the remarks on a visit to the Port of Southampton, where he met staff for a question and answer session. One worker, who said she’d had to take a second job, told him: “I am terrified for my future and the cost of living just going up and up and up. ”

Mr Starmer told her: “You speak for millions of people.” He went on: “I know what it feels like not to be able to pay your bills. And that’s the position for too many people right now who are having to take on a second job.”