UK Finance Minister Rachel Reeves pledged to make “necessary”, “urgent” and “extremely difficult” choices to restore the country’s economic stability.
Pool | Getty Images News | Getty Images
UK Finance Minister Rachel Reeves on Monday declare The cuts came after details of how the newly elected Labor government inherited a projected £22 billion ($28.2 billion) overspending from the centre-right Conservative Party.
In a much-anticipated statement in the House of Commons, Reeves pledged to make “necessary”, “urgent” and “extremely difficult” choices to restore the country’s economic stability.
As well as cutting winter fuel bills, the finance minister said the centre-left government would scrap plans to restore the rail fund, cancel plans to build a tunnel at Stonehenge and review hospital expansion plans announced by former Conservative Prime Minister Boris Johnson.
Reeves also said she had scrapped plans to sell NatWest shares to the public, saying the proposals put forward by her predecessor Jeremy Hunt were not “good value for money”.
“We can’t do this if we can’t afford it,” Reeves said, adding that investment cuts would not be enough to make up the shortfall. She warned that “tough decisions” would still be made on spending, benefits and taxes.
Reeves said she plans to release her first annual budget on October 30, which will be the first major fiscal event of the new administration.
The finance minister has previously ruled out increasing the main sources of government revenue such as income tax, national insurance, value-added tax or corporation tax. However, given her party’s pledge to increase state investment and public sector pay, Reeves must orchestrate a delicate balancing act.
Responding to Reeves’ comments, Shadow Treasurer Jeremy Hunt said: “Today she shamelessly tried to lay the groundwork for a tax hike that will fool absolutely no one.”
Hunt also criticized the finance minister for saying the situation around public finances was new information to the government.
Reeves has held the position since centre-left Labor secured a parliamentary majority in the UK general election earlier this month. Her comment was seen This is likely to set the tone for the rest of her career as chancellor.
Reeves told CNBC on Friday that a Labor government would be the “most pro-growth, pro-business” government the country has ever seen.
—CNBC’s Karen Gilchrist contributed to this report.
About The Author
