'We're facing a national emergency': Rachel Reeves says government 'failed' to tackle cost of living

Opening her speech at the Labour Party conference, the shadow chancellor explained why the pound plummeting and the Tories' tax cuts will mean higher prices for everyone

Shadow Chancellor Rachel Reeves has hit out at the government for "failing" to tackle the cost of living crisis as she warned the UK is facing a "national emergency".

Speaking at the Labour Party conference in Liverpool, Ms Reeves lamented how the weekly food shop and energy bills are going up - but "people's wages are not keeping up."

Under a Labour government, she said she would bring back the 45p top rate of income tax - abolished by Chancellor Kwasi Kwarteng on Friday during his mini-budget - and use the funds to boost dwindling NHS staffing numbers.

In her "pro-business" and "pro-worker" speech, Ms Reeves also pledged to guarantee a minimum wage that “reflects the real cost of living”.

She vowed she would become the "first green chancellor" as she announced investment to fund green businesses to help boost the economy.

During the four-day event, the Labour Party is set to focus on capitalising on the controversy over the Conservatives' biggest tax-cutting measures in half a century.

The pound plummeted to an all-time low early on Monday, as spooked investors reacted to the government's tax measures.

"Sterling is down. That means higher prices as the cost of imports rise," she told the audience in Liverpool.

"The cost of government borrowing is up that means more tax payers money will go into paying the interest on our government debt.

"And in turn, that means the cost of borrowing for working people will now go up too with higher mortgage repayments for families.

"And all for what? Not to invest in the industries of the future. Not for our NHS and not for our schools. But for tax cuts for the wealthiest.

"A return to trickle-down economics - an idea that has been tried, has been tested and has failed."

Her comments came as sterling fell to its lowest level against the dollar since decimalisation in 1971, after Mr Kwarteng suggested another round of tax cuts would follow those he unveiled last week.

The pound's nosedive is sparking anxiety the currency could hit parity with the US dollar for the first time in history, after dropping by more than 4% to just USD$1.03, before gaining some ground to reach $1.09 as trading picked up on Monday afternoon.

It comes after experts and even Tory MPs expressed concern over the government's "gamble" to borrow £70 billion to fund tax cuts at a time when a recession looms and inflation soars.

Ms Reeves accused Liz Truss and the chancellor of being "out of control" and said they've have "lost credibility" with their economic measures.

Political Reporter Shehab Khan sets out why the pound has fallen and how it will impact the UK

She told the conference that Mr Kwarteng had an opportunity on Friday during his mini-budget to "set out a serious response" to spiralling prices - but "failed" by choosing to focus on the wealthiest in the country.

Ms Reeves also accused the government of waiting too long to help people pay for their energy bills.

She pointed out that Labour called for a windfall tax "on the unimaginable profit being made by the oil and gas companies" - but instead, "the prime minister is content to let your children and grandchildren to pick up the tab".

"Under these Tories, those with the broadest shoulders carry the lightest load. Not by accident, but by choice," she said. “It is time for a government that is on your side.”

Ms Reeves used her party conference speech to also announce that a Labour government would create a state-owned investment fund to back projects which could generate wealth for the nation.

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The fund would begin with an initial £8.3 billion investment to fund green industries, as she pledged to become the "first green chancellor" and promised there would be no return to austerity.

Ms Reeves also set out how she would fund the NHS if she were to become chancellor - by bringing back the top income tax rate of 45% on earnings above £150,000 and use the money generated to train more new district nurses, health visitors and midwives.

She said a Labour administration would also implement the “biggest expansion of medical school places in British history” in a bid to ensure the NHS has the “doctors it needs”.