UK Chancellor of the Exchequer Rachel Reeves speaks on the second day of the Labor Party’s annual conference in Liverpool, northwest England, September 23, 2024.
Paul Ellis | AFP | Getty Images
LIVERPOOL, England — Finance Minister Rachel Reeves vowed on Monday that Britain would not return to austerity but said she would make tough choices when she presents her budget proposals next month.
“This will be a truly ambitious Budget… a Budget that delivers the change we promised. A Budget that rebuilds Britain,” she told a group of Labor delegates on Monday. “There will be no return to austerity.”
Her keynote address was briefly interrupted by a question from a pro-Palestinian protester in the crowd.
The ruling Labor government has faced criticism for creating an apocalyptic atmosphere over the state of public finances, with Prime Minister Keir Starmer warning after the party’s victory in July’s general election that the party would ” “Painful” decision.
Reeves hinted she might raise taxes in the upcoming autumn budget on October 30 after identifying a £22 billion ($29 billion) “black hole” in the public finances. Her predecessor, Jeremy Hunt of the rival Conservatives, denied the claims, calling them “fiction.”
“I know you are impatient for change. But because of the Conservative legacy, the road ahead is steeper and more difficult than we expected,” she told viewers on Monday.
Reeves defended the divisive move to cut winter fuel subsidies for millions of pensioners earlier this month as “the right decision in the circumstances we have inherited”.
However, she reiterated that the government would not increase income tax, National Insurance social security payments, value-added tax (sales tax) and company tax
Instead, she vowed to raise extra revenue by removing the UK’s non-domestic tax benefits and cracking down on forms of tax avoidance and evasion.
“This government will not stand by and tolerate those who don’t pay their taxes,” she said.
Reeves also reiterated the government’s “proudly pro-business” stance and mentioned plans to hold a business summit next month and announce proposals for a new national industrial strategy. She said this would include measures to achieve the UK’s net zero emissions and clean energy targets by 2030.
Additionally, she said the government will continue to pursue trade deals to “open up new markets” as negotiations with key partners such as India are still ongoing.
“After years of instability and uncertainty, the UK is open for business again,” she said.
An Ipsos poll on Friday showed that half of Britons, including a quarter of Labor voters (26%), are disappointed with the government’s achievements so far. Gideon Skinner, senior director of politics at Ipsos UK, said the findings showed the government’s “honeymoon period” was over.
“After months of hope following the election, pessimism and concern have returned,” Skinner told a Labor conference earlier on Monday.
