Chancellor Rachel Reeves has been accused of refusing to “face up to her own failures” by “flying to Beijing” during a week of market turmoil.
Shadow chancellor Mel Stride accused the chancellor of dodging tough questions as “the government lost control of the economy” while Ms Reeves visited China last week with a delegation including the governor of Bank of England and the directors of HSBC, Standard Chartered. and Schroders.
Long-term 30- and 10-year government borrowing costs rose on Monday, with the 30-year effective interest rate (the yield on gilts) hitting a new high of 5.47% – a rate not seen since mid -1998.
The pound also hit a 14-month low, raising questions about the chancellor’s future.
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It received a slight respite on Tuesday morning as sterling recovered some loss and rose slightly to $1.22, while government borrowing costs fell slightly.
But the Conservatives took advantage of Ms Reeves’ absence over the past week to attack her, with Mr Stride telling the House of Commons: “While the government was losing control of the economy, where was the chancellor ?
“His trip to China had not yet begun when my urgent question was asked in the House last week. She was still in the country, but she sent the chief secretary rather than face her own failures.
“So can I ask (Rachel Reeves) why she chose not to answer this herself? Of course, the chancellor avoided the tough questions by flying to Beijing.
“I think in Labor circles it’s called the Peking Duck.”
Chinese Vice President Han Zheng with Rachel Reeves in Beijing during his visit. Photo: AP
But Ms Reeves rejected the criticism and pledged to stick to the fiscal rules she laid out in October’s budget – to ensure that day-to-day spending is financed by tax revenue and to reduce the share of debt in the economy.
“We remain committed to these budgetary rules and we will respect them at all times,” she said.
She also defended her trip to China, saying engaging with countries around the world would “generate growth”, and said she had raised human rights issues with China.
“Leadership is not about dodging these challenges, it is about meeting them,” she told the House of Commons.
“And the economic difficulties we face remind us that we must, indeed must, go further and faster in our plan to revive economic growth which plunged under the last government. »
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The Chancellor said her trip to China made it easier for British businesses to access the Chinese market and helped safeguard the UK’s national security.
New deals agreed on vaccine approvals, fertilizers, whiskey labeling, legal services, automotive and accounting to “unlock £1 billion of value for the UK economy”, she declared.
Ms Reeves said she had raised the case of jailed British citizen and media mogul Jimmy Lai with every minister she met in China.
She said she had also raised concerns about Russia’s war in Ukraine, human rights, restrictions on rights and freedoms in Hong Kong and “totally unjustified sanctions against British parliamentarians”.
“One of the main outcomes of this dialogue is that we have secured commitment from China to improve existing channels so that we can openly discuss sensitive issues and how they impact our economy, because if we do not We cannot engage with China, we cannot express our real concerns,” she said.
“This dialogue is only part of our engagement with our trading partners around the world. »