Chancellor Rachel Reeves plans to deliver an emergency assessment of the UK government’s spending inheritance before MPs adjourn for their summer break, aiming to attribute the impending “tough tax and spending decisions” to the previous Conservative government, as reported by The Guardian.
In her inaugural speech at the Treasury, Reeves emphasised Labour’s commitment to reducing the national debt despite what she described as “the worst set of circumstances since the Second World War.” She instructed officials to prepare an assessment of the UK’s public spending position to better understand the challenges ahead. This assessment, separate from the budget planned for the autumn, will be presented to MPs by the end of the month.
Reeves firmly placed the responsibility for the forthcoming difficult decisions on the outgoing government. She highlighted the legacy of “14 years of chaos and economic irresponsibility” and acknowledged the scale of the challenge Labour has inherited.
Labour insiders indicated that the emergency statement aims to inform MPs about the current state of the economy rather than reveal details of the upcoming budget. Since the election, Reeves has faced pressure from Unite union leader Sharon Graham to modify debt rules to allow for increased public spending.
Reeves reiterated Labour’s commitment to their election manifesto, including maintaining robust fiscal rules and not increasing national insurance, income tax, or VAT rates. She addressed voices suggesting a shift away from cautious fiscal policies, affirming that Labour will uphold the promises made during the election campaign.
Reeves also announced that local authorities would be required to meet housing targets, aiming to build 1.5 million homes over the next five years, with initial decisions left to local communities.
Rain Newton-Smith, CEO of the Confederation of British Industry, and Jamie Lockerbie, a planning partner at Pinsent Masons, both responded positively to Reeves’ focus on growth and planning reform, while highlighting concerns about the capacity of the Planning Inspectorate to handle an increased workload.
