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Live webchat with Rachel Reeves MP, Labour's shadow Chief Secretary to the Treasury, Monday 26 March, 12.30 pm

(88 Posts)
JustineMumsnet (MNHQ) Sun 25-Mar-12 20:52:09

Labour's shadow Chief Secretary to the Treasury, Rachel Reeves MP, is joining us for a webchat tomorrow, Monday 26th March, 12.30-1.30pm (just before she nips of to the Common's chamber to close the budget debate).

Rachel was elected to Parliament at the last general election, having previously worked as an economist for the Bank of England, the British Embassy in Washington and at Halifax Bank of Scotland and is regarded as one of Ed Miliband's high-flyers and a potential future leader of the labour party.

Rachel's keen to answer any of your questions: from tax credits to child benefit, personal allowances to pension age (and of course anything a bit more exciting in between).

As ever, if you can't join us live - do post a question in advance.

JustineMumsnet (MNHQ) Mon 26-Mar-12 12:23:23

Hello all,
We are here in Rachel's office at Westminster and will be kicking off shortly.

RachelReevesMP Mon 26-Mar-12 12:29:17

Hello - it's great to be here taking questions on Mumsnet. Thanks to everybody who's posted questions already I look forward to answering as many as possible over the next hour or so - then I'm off to the House of Commons to close the budget debate for the Labour side - against Danny Alexander the government....

RachelReevesMP Mon 26-Mar-12 12:31:43

Pantone363, LilyBolero, fivegomadindorset and others have asked about petrol prices.

You’re totally right, that increased petrol prices are a big issue, not just for mums but for everyone. When I filled our car on Saturday, it cost over £70 which was quite a shock. Labour have been arguing for a cut in VAT – back down to 17.5% until the economy is back on track. That would take 3p off a litre of petrol and ease some of the pressure on family finances.


Hi Rachel

I have 1 question, and 1 point, hope that's ok.

Question first;

Fuel duty

We currently pay massive amounts of fuel duty. What lots of people don't realise is that we also pay VAT, both on the fuel, AND ON THE DUTY. So when the chancellor puts 3p on the fuel, that is actually 3.6p, because 20% VAT is charged on that 3p. Given that fuel prices have risen so extortionately this year, the treasury must be having a bumper year on fuel, with unanticipated VAT coming in. Do you think that VAT should be applied to fuel BEFORE the duty is applied? It really doesn't seem reasonable that we should have to pay VAT ON TAX.

Now my point;

Child Benefit - somewhere along the line, someone has decided that it is reasonable for higher rate taxpayers with children to shoulder a much higher deficit reduction burden than higher rate taxpayers without children. We are going to be paying a 72% marginal tax, when many people on much higher incomes without children are receiving a tax cut, because '50% is too high', and many other families on much higher incomes (up to 99k) are still receiving the full child benefit. If they suggested increasing the rates of income tax to the level that would be necessary to sting people for this much money, there would be an absolute revolt, but because it is a relatively small group of people, they don't seem to mind crippling them, because, hey, it's not that many votes.

Surely now it cannot raise much money, with the massive administration costs (500,000 more tax returns to process for example)!

So the point is, why is a FAMILY on HRT having to pay ££££ more than no-children household. (Remember Child Benefit was originally a tax allowance, hence why it is administered by HMRC, as recognition of higher costs of having children).

Pantone363 Mon 26-Mar-12 12:33:49

3p? That is nowhere near enough, we need the VAT cut and a cut in fuel duty.

RachelReevesMP Mon 26-Mar-12 12:34:07

Am doing a fuller answer on child benefit, but on this, the government say that your NI should still be paid to entitle you to a pension etc, but I think this is an example of the unfairness of the child benefit changes, whereby someone earning more than £50k loses all their child benefit while a two income family on £49k each could keep all of theirs.


Another child benefit question: I gave up work to look after my kids, so am concerned that my National Insurance contributions won't be paid when we are no longer eligible for child benefit (husband earns over 60k).Or is the official policy to continue to claim it and my husband's tax code changes to give the equivalent amount of money back? Which seems a roundabout way of doing things!

MissAnneThrope Mon 26-Mar-12 12:34:16

Pleased to see that David Miliband is stepping forward again. It's true that Ed's scored a few comedy hits at PMQs recently, but I'm with Lord Glasman - EM has "flickered rather than shone, nudged, not led".

3 months on, do you think that voters have any clearer idea of what Labour's narrative is? I can't help feeling that we still show no signs of winning the economic argument with the public.

CharlotteBronteSaurus Mon 26-Mar-12 12:36:22

Hi Rachel, lovely to have you here.

What is Labour's position on regionalised pay across the public sector? I am right in thinking this started in the Court Service under Labour?

I am concerned this will lead to more key worker shortages in urban areas, much as keyworker are difficult to retain in London.

RachelReevesMP Mon 26-Mar-12 12:36:59


Oooh exciting! Well first of all - I think you're fantastic Rachel - more power to your superbly well informed elbow and all that.

Enough grovelling - child benefit. Do you agree that the Government's proposed changes to the benefit will dospropotionately disadvantage women? What will Labour be doing to combat this proposed change?

Thank you Northernlurker! That’s v nice of you.

Lots of you have asked about child benefit and despite the govt making a bit of a change in the budget last week there is still a crazy anomaly whereby a single mum, or a single earner family where mum or dad stays at earn to look after the kids, earning £50k can start to lose her child benefit and at £60k lose it all. While a dual income family on £99k could lose all of their benefit. That’s crazy. I think that child benefit should be a universal benefit – we all pay in to the welfare state through national insurance, and so when we need some extra support – when we have children, when we retire – i think we should be able to get something out. What the govt have done is massively over-complicate the child benefit system which is going to cost more to administer and what they have done is also very unfair on single income families.

RachelReevesMP Mon 26-Mar-12 12:37:41

One of the most depressing articles I've read in a national newspaper since i got elected was a piece in the Mail on Sunday calling three other Labour women and me 'Milibabes'. I like to think that I got to where I am because of what I have to say, not just because I'm a woman. In terms of practical steps, the hours of Parliament need to be reformed. Tonight we'll probably be here until after 11pm. There is now a crèche in parliament (same newspaper thinks it's a bad idea too!) and I think that's a good thing for MPs, men and women, with kids and for the people that work for us.

22% of MPs are now women, but at this rate of progress it will take 14 more general elections until things are equal... Hopefully we can speed that up a bit.


Ooo I like Rachel reeves.

What would you go to get more women into politics, at the top level as equals, rather than just token 'advisers' or 'babes'?

LilyBolero Mon 26-Mar-12 12:39:23

Thanks for your answer on fuel - could you consider arguing for VAT to be applied to fuel BEFORE the duty - would make a real difference! We can barely afford to fill our car up, £80 last time we did.

RachelReevesMP Mon 26-Mar-12 12:41:01


Hello Rachel,

As someone who worked for the Bank of England and HBOS in the years leading up to the financial crisis, did you see the crash coming? Did you think there was something fundamentally unsustainable about the culture of CDOs and all that jazz, or did you think it was all basically OK? Did you argue at the time for greater regulation of the financial sector,

I guess what I'm saying is - one of Labour's big problems on the economy is the perception that you (without wishing to be rude) were all in it up to your necks, whether in private banks, the Bank of England, the Treasury or actually within government, in the years leading up to the crash. How can people like you, E Miliband and Balls persuade us that you've understood where you, collectively, went wrong?

I didn't see it coming, but it is clear that regulation didn't work properly. There was a lot of regulation but the right questions weren't being asked, there was too much focus on short term profits rather than building long term value in financial services and that was something that worried me during my short time at HBOS.

You're totally right that Labour has a big job to do in showing people that we can be trusted on the economy. I hope that my experience in economics and financial services can help in that progress and I do think it's helpful to have people who understand the industry. (My first job at the Bank of England was to understand quantitative easing and the zero interest rate policy in Japan!)

LilyBolero Mon 26-Mar-12 12:41:39

Also, on the child benefit, as well as the dual/single income anomaly, there is still the basic unfairness that HRT payers with children are being hit for thousands of pounds a year, whilst HRT payers without children are not hit at all.

iseenodust Mon 26-Mar-12 12:42:05

Public sector regionalised pay is already with us as there are London & outer London weightings inocorporated in the pay scales. The cost of living element of argument therefore doesn't justify change.

I think the mobilising the workforce element carries no weight apart from admin type roles. Nurses & teachers etc are not going to jump to the private sector either because those jobs don't exist in great numbers or for reasons of political view.

The end result to me looks like a huge widening of the north/south divide and more money spent on administering pay/negotiations.

Question: Am I missing something?

RachelReevesMP Mon 26-Mar-12 12:43:56

Hello - how fantastic to hear from you! Are you still in Somerset? (I actually was in touch with our old head teacher recently!)

It’s really important that people can afford to work, and that we make sure childcare is part of that balance. I think that too often childcare slips between the responsibilities of different government departments, and right now we’re facing a crisis in child care. More than 30,000 women have given up their jobs because childcare and other costs mean they cannot afford to work.

I think we need to look at doing things differently – to make sure that childcare reflects modern families, and to make sure that work pays.

Yvette Cooper is looking at other countries to see how they do it - in Norway, for example, parents can access childcare from birth to age five – at a cost that is half the international average. In Denmark, childcare is free to the lowest income families. Denmark and Norway have 10% more women in work than the UK. We will be studying both closely.

Closing Sure Start and children's centres, and cutting back the services they offer hasn't helped either. Another example of how government cuts are hitting women and families.

Again, really lovely to hear from you, my sister says hello too!


At the risk of sounding stalkerish - hi, we were penfriends when we were 10! (Clue: I'm guessing the same teacher with a red beard taught us chess!) Serious congratulations on the career!

Embarrassed now. OK stalker bit over; I do have a question! I'm a teacher now and paying for childcare for two children - childcare vouchers have pretty much made it (just about) financially viable for me to work. However, the amount we can contribute tax-free has already been reduced - is this a scheme that the Government can no longer afford and would Labour plan to keep it? There must be thousands of parents out there with skills that would contribute to society who are finding it hard to afford to work.

Did that make sense? Will be at work tomorrow but hope the webchat goes well!

MrsHenryWood Mon 26-Mar-12 12:44:49

<squeezing in another question and hoping that no-one notices>

Rachel, could I ask about your personal ambition within politics; clearly most MPs aim to make a positive difference along the lines of implementing their personal philosophy, but would you also fancy the top job one day, or is that something that you're never allowed to admit to until you're actually there?

Titchyboomboom Mon 26-Mar-12 12:46:05

Hi! I am a working mum and run a childminding business from home while looking after my young daughter. We are having our local children's centre services dramatically reduced as a result of budget cuts, and I wondered whether you think money will be put back into this service eventually - my concern is that cuts to these lifeline services will adversely affect so many children at such a vulnerable time in their lives.

RachelReevesMP Mon 26-Mar-12 12:47:12


Pleased to see that David Miliband is stepping forward again. It's true that Ed's scored a few comedy hits at PMQs recently, but I'm with Lord Glasman - EM has "flickered rather than shone, nudged, not led".

3 months on, do you think that voters have any clearer idea of what Labour's narrative is? I can't help feeling that we still show no signs of winning the economic argument with the public.

I think that Ed and Andy Burnham have done a superb job in the last few weeks exposing what the health bill means for the NHS. And also think that Ed was great in the budget response. But we’ve all got to raise our game if Labour are going to win the next election. Especially on the economy, got to persuade people that there is an alternative that gets the economy moving, brings down unemployment and gets a grip on the deficit too. We’re moving in the right direction but I know we’ve got to do more.

Spiritedwolf Mon 26-Mar-12 12:49:33

My DH and I tried to concieve for many years before I finally became pregnant with our first baby, we are delighted, of course.

Unfortunately the delay in conception has meant that our baby is coming into being at a time when the government of the day seems to think it appropriate that young families pay for the collapse of the private financial sector. The loss of:

The Health in Pregnancy Grant
Government payments into a Child Trust Fund
Reductions in Child (Baby?) Tax Credits and restrictions in those qualifying for them
The end of universal Child Benefit

No doubt there are other things I haven't factored in (funding for Sure Start centres?), reduction in Childcare element of WTC, changes that affect parents who rely on housing benefit etc.

As new parents begin families under this child-hostile government, what would Labour do to improve the lives of our children under a future Labour government?

RachelReevesMP Mon 26-Mar-12 12:50:41


Hi Rachel,

Do you think that the speed and severity of the cuts risk damaging public services and stalling the economy?

Yes!!!!! The fact is the economy has flatlined for more than a year now, unemployment is at a 17 year high and women's unemployment is the highest for 20 years. And because of this, the government is borrowing an extra £150bn because they're paying more out in welfare bills and getting less in in taxes as the economy struggles (not to mention the devestating impact of cuts on police numbers, hospital waiting lists and local services). I think there should be a more balanced approach to deficit reduction and a proper strategy to address the mounting costs of rising unemployment.

JugglingWithTangentialOranges Mon 26-Mar-12 12:51:08

I've always worked with the under 5s - am a qualified Nursery Teacher but have worked in other roles too.

I've heard it said that for every £1 spent in this sector society will save £6 in the future (through increased taxes from wages and less future cost to society such as in prison costs)

So, can we have more investment in this area please, including a reasonable living wage and a job for myself ? Have been looking for a job since the New Year.

RachelReevesMP Mon 26-Mar-12 12:54:52

Pay review bodies nationally are a better way of delivering flexibility while keeping a lid on costs. George Osborne is going for a free-for-all - pitching hospital against hospital, school against school – in a way which is unfair and which could potentially cost more in the long run.

But most of all, I think that regional pay is a cover for eroding public sector pay in the North of England. The Government say that public sector workers are overpaid in the North and that 'high public sector pay' is stopping private sector investment. The idea that the pay of teachers, nurses and local government workers in the north east is discouraging business growth is, in my view, a joke. The impact of regional pay is likely to exacerbate the north/south divide and take even more money out of the North of England.


Hi Rachel, lovely to have you here.

What is Labour's position on regionalised pay across the public sector? I am right in thinking this started in the Court Service under Labour?

I am concerned this will lead to more key worker shortages in urban areas, much as keyworker are difficult to retain in London.

Northernlurker Mon 26-Mar-12 13:00:50

Also sneaking in another question - would you describe yourself as a feminist?

RachelReevesMP Mon 26-Mar-12 13:00:53


Hi Rachel,

I have traditionally voted Labour, but, having been lucky enough to have worked my way up to a high-paying job (50% tax-payer), am increasingly alienated by the Labour Party's hostile language and attitude towards people currently in this income bracket.

I would like to know whether the Labour party is still interested in getting my vote, or am I ultimately more useful as a scapegoat, gaining you political capital with the "squeezed middle"?

Thanks smile

Whilst we've got a big deficit I think it's right to ask everybody to shoulder some of the burden in getting it down. The government is cutting working tax credits, child benefit, pensioner allowances and public services. And I believe that people on higher incomes should have to pay a bit more too. Which is why I think Alistair Darling was right in introducing the 50p tax rate and why I believe George Osborne is wrong in getting rid of it. This year 300,000 people earning more than £150k will be getting an average tax cut of £10k and for the 14,000 people earning more than 1 million, they'll be getting an average tax cut of £40k. I just don't think that can be justified right now. If there's any spare cash around it should be used to support families on modest and middle incomes who are struggling to make ends meet. I don't think that's anti-business or anti people who have worked hard, it's just a matter of priorities when there's not much money around.

RachelReevesMP Mon 26-Mar-12 13:02:51

The change to pensioners' allowances ('granny tax') was buried in the small print of the Budget, and will hit pensioners to the tune of £3 billion. It was the only thing that came as a surprise on Wednesday lunchtime after all the news that came out in the papers before. It will affect more than 4 million pensioners, who will lose on average £83 and for those people turning 65 next year, they stand to lose up to £322.

Many people coming up to retirement have had to make sacrifices to put money aside for their pension and feel that they are now being penalised for this. I don't think it's right to reduce the real incomes of pensions while giving such a big tax break to the highest earners.


Hi Rachel

Do you think the granny tax is fair? Isn't it about time that the richest generation ever (ie the baby boomers) shouldered a bit more of the tax burden from their accumulated wealth in cash and assets?

JugglingWithTangentialOranges Mon 26-Mar-12 13:10:19

Really glad to see from an earlier answer you gave that you will be looking closely at provision for under 5s/ child care in Norway and Denmark in forming policy for the UK.

As an early years practitioner I felt the recent Panorama programme showed they have so much to offer us in terms of fresh ideas and better approaches.
A real respect for young children and families, as well as those who work with them, came across very strongly.

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