Rachel Reeves has been accused of making the British economy “far more vulnerable” with “gross mismanagement” amid global insecurity by Shadow Chancellor Sir Mel Stride.
The Chancellor was challenged on her handling of the current situation while updating the Commons on her response to the conflict between the US and its allies with Iran.
Sir Mel began: “It is clear that these are very serious and concerning times, and the developments in the Middle East are already having profound consequences for our corporate dollars per barrel.”
“For the first time since the 2022 energy crisis, that alone is enough to have huge knock-on effects for households and businesses."
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Aiming the Chancellor, he said: “Her approach to the economy in the run-up to this crisis, her gross mismanagement, has left us far more vulnerable than would otherwise have been the case.”
“The government, of course, is continuing to impose ruinously high taxes on our oil and gas sector and choosing to rely on imports instead of maximising our own domestic energy supply.
“That is proving to be an incredibly short-sighted approach, but as the right hon lady has just told us, there will be no change in direction; that is the wrong choice.”
Responding, Rachel Reeves urged the Shadow Chancellor not to “scaremonger” about energy bills.
Rachel Reeves has been accused of making the British economy 'far more vulnerable' with 'gross mismanagement'
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She hit out at “inaction and delay from the Conservatives when they were in government for 14 years".
“This Labour Government is backing the industries of the future, such as carbon capture and storage, funded at the spending review, not funded by the party opposite, because we back Britain’s energy security.
“On energy bills, I would urge (Sir Mel Stride) not to scaremonger.
"The £150 cut to energy bills that I announced in the Budget will continue, as confirmed by Ofgem. We removed the failed Eco scheme, and we removed a number of levies from bills."
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The Shadow Chancellor was responding to Ms Reeves's emergency statement
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In her emergency address on Britain's economic response to the Middle East crisis, the Chancellor admitted the conflict was “likely to put upward pressure on inflation” over the coming months.
“The economic impact of the situation in the Middle East will depend, of course, on its severity and its duration. The movements that we have already seen are likely to put upward pressure on inflation in the coming months.”
"We don't yet know how long the conflict will last or what further action will be required, but it is my duty to be responsive in an uncertain world and responsible in the national interest. to protect the public finances and help families with the cost of living," she promised.
"I am clear-eyed about my response to the current situation. My economic approach will both be responsive to a changing world and responsible in the national interest," she promised.
The address came as the UK scambles to respond to the US conflict with Iran
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Ms Reeves also told the Commons that she “stands ready” to support a coordinated release of oil reserves held by the International Energy Agency.
The Chancellor updated MPs on her plans after speaking with finance ministers from the G7 earlier on Monday.
“I want to ensure the country that the fundamentals of Britain’s economy are strong. Every step that I have taken since the election has built our national resilience.
“Stability in the public finances, investment in infrastructure in both defence and energy security, and reform to our economy.”
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