- The ruling Labour government has faced criticism for generating an atmosphere of doom over the state of the public finances.
- Prime Minister Keir Starmer has warned of “painful” decisions after the party rallied to victory in the July general election.
Liverpool, ENGLAND — U.K. Finance Minister Rachel Reeves vowed on Monday that Britain will not return to austerity, but said she would make hard choices as she lays out budget proposals next month.
“It will be a budget with real ambition … a budget to deliver the change we promised. A budget to rebuild Britain,” she told a crowd of Labour party delegates Monday. “There will be no return to austerity.”
Her keynote speech, briefly interrupted by heckles from a pro-Palestinian protester in the crowd, came as Labour kicked off its annual party conference on Monday — its first in power for 15 years.
The ruling Labour government has faced criticism for generating an atmosphere of doom over the state of the public finances, with Prime Minister Keir Starmer warning of “painful” decisions after the party rallied to victory in the July general election.
Reeves has suggested that taxes are likely to rise at her upcoming Oct. 30 Autumn budget after discovering a £22 billion ($29 billion) “black hole” in the public finances. Her predecessor Jeremy Hunt, from the rival Conservative Party, has denied the claims as “fictitious.”
“I know that you are impatient for change. But because of that legacy inherited by the Conservatives, the road ahead is steeper and harder than we expected,” she told the audience Monday.
Reeves defended a divisive move earlier this month to cut winter fuel allowances for millions of pensioners as the “right decision in the circumstances we inherited.”
However, she reiterated that the government would not raise income tax, the National Insurance social security payments, value-added tax (a sales levy) and corporation tax
Instead, she vowed to raise additional revenues by eradicating the U.K.’s non-dom tax concession and clamping down on forms of tax avoidance and tax evasion.
“This government will not sit back and indulge those who do not pay the taxes they owe,” she said.
Reeves also restated the government’s position as “proudly pro-business,” referencing plans next month to host a business summit and announce proposals for a new national industrial strategy. That, she said, would include measures for Britain to reach its net zero and clean energy goals by 2030.
Additionally, she said that the government would continue to pursue trade deals to “open up new markets,” as negotiations currently remain underway with major partners such as India.
“After years of instability and uncertainty, Britain is open for business once again,” she said.
Half of Britons, including a quarter of Labour voters (26%), are disappointed with the government’s achievements so far, Ipsos opinion polling showed Friday. Gideon Skinner, Ipsos’ senior director of U.K. politics, said the findings were an indication that the government’s “honeymoon period” was over.
“There’s a seeping back of pessimism and concern following a few months of hope after the election,” Skinner said earlier Monday at the Labour party conference.
Source: Economy - cnbc.com
