The UK Government has set out the next steps for tax measures from the manifesto on which the Government was elected, including policies to close tax loopholes and tackling tax avoidance.
This is to provide taxpayers with certainty ahead of their final confirmation at the Budget on 30 October 2024.
Further details on all policies including costings will be published at the Budget, and will be certified by the Office for Budget Responsibility.
Ending tax breaks for private schools and raising revenue to fund state education priorities
The Government is publishing a technical note setting out its plan to introduce 20% VAT on education and boarding services provided by UK private schools from 1 January 2025.
o 20% VAT will also apply to pre-payments of fees for terms starting on or after 1 January 2025 made on or after 29 July 2024.
Over 94% of school children in the UK attend state schools and ending the tax breaks on VAT and business rates for private schools will secure additional funding to help recruit 6,500 new teachers and roll out breakfast clubs to all primary schools.
These changes will not impact pupils with the most acute special educational needs, where their needs can only be met in private schools. Where pupils’ places in private schools are being funded by local authorities (LAs) because their needs can only be met in private school (e.g. in England, where attendance at that private school is required by a child’s Education, Health and Care Plan (EHCP), LAs will be able to reclaim the VAT so it does not apply to those fees.
This change will only apply to tuition fees and boarding fees charged by private schools. The VAT treatment of other services or goods provided by private schools – such as nursery care, wrap-around childcare, school meals and holiday clubs, and part time classes operated by third parties within schools – such as music and drama clubs and Sunday schools – will not change. The VAT treatment of state boarding fees will also continue to be exempt from VAT.
The government will also end business rates relief for private schools. This change means private schools in England will no longer be eligible for charitable rates relief and will pay their full business rates liability. This is intended to take effect from April 2025, subject to Parliamentary passage.
The VAT changes will be legislated for in the Finance Bill introduced following the Budget. The business rates changes will be legislated for through a Local Government Finance Bill led by the Ministry for Housing, Communities, and Local Government (MHCLG).
Non-Doms: Removing domicile status from the tax system and implementing a new internationally competitive residence-based regime
The Government is committed to addressing unfairness in the tax system, so that everyone who makes their home in the UK pays their taxes here.
That is why the Government will remove the outdated concept of domicile status from the tax system and replace it with a new internationally competitive residence-based regime, focused on attracting the best talent and investment to the UK.
A policy note has been published to set out the government’s plan to end the use of offshore trusts to avoid inheritance tax and scrapping the 50% tax reduction on foreign income in the first year of the new regime.
From April 2025, anyone who has been tax resident in the UK for more than four years will pay UK tax on their foreign income and gains (FIG), as is the case for other UK residents. This is a simpler and clearer test, with less scope for ambiguity than the current regime.
New arrivals to the UK will benefit from 100% UK tax relief on their FIG for their first four years of tax residence, provided they have been non-resident for the last 10 years. This is more attractive than the current approach, as they will be able to bring FIG into the UK without attracting an additional tax charge, encouraging them to spend and invest these funds in the UK.
To support transition and provide time for adjustment, a Temporary Repatriation Facility (TRF) will be available for individuals to bring pre-6 April 2025 FIG held offshore into the UK at a reduced rate of tax, to encourage these funds to be spent and invested in the UK.
Behavioural impacts and costings will be published at the Budget.
Energy Profits Levy
The Government is publishing a policy document that confirms its intention to increase the rate of the Energy Profits Levy (EPL) by three percentage points to 38% from 1 November 2024.
The levy will also be extended from 31 March 2029 to 31 March 2030.
The Government will remove unjustifiably generous investment allowances from the EPL, starting by abolishing the levy’s core investment allowance from 1 November. The decarbonisation allowance will be retained.
The Government will reduce the generosity of capital allowances (including First Year Allowances) when calculating EPL profits – providing further details on these changes at Budget.
The Energy Security Investment Mechanism will remain, helping to provide operators and their investors with confidence the levy will no longer apply if prices fall to, or below, historically normal levels for a sustained period.
Further details on the Government’s approach to all allowances in the EPL, and costings, will be set out at the Budget.
The Government recognises the importance of providing the oil and gas industry with long-term certainty on taxation after a period of change. The government will work with the industry and others to develop and implement a successor regime for responding to price shocks after the EPL ceases.
The UK Government is also:
Publishing a call for evidence confirming its intention to take action against the carried interest loophole, and to form the basis for detailed engagement with expert stakeholders.
o Carried interest is a form of performance-related reward received by fund managers, primarily within the private equity industry.
o Reforms will ensure fairness, whilst also recognising the vital role that our world-leading asset management industry plays in channelling investment across the UK.
Tackling the tax gap. Reforming the tax system by making policy changes to simplify tax, close loopholes and reduce non-compliance, designing out non-compliance before it happens. At the Budget, the government will provide an update on the implementation and development of measures that form its plan to close the tax gap.
The government will invest in HMRC’s compliance work, hiring around 5,000 additional staff to recover more tax revenues. HMRC has already started the process of recruiting additional staff into compliance roles.
The government will also invest in HMRC’s technology infrastructure, helping to make HMRC more efficient and improve taxpayers’ experience of interacting with HMRC.
Chancellor reveals £22 billion of unfunded pressures inherited from the previous Government
Findings of a Treasury spending audit reveal £22 billion of unfunded pledges inherited from the previous Government this year.
Chancellor takes “difficult decisions” to find £5.5 billion of savings this year and £8.1 billion next year.
A set of non-negotiable fiscal rules will be confirmed at Budget on 30th October, alongside further difficult decisions on tax and spending.
Finalised departmental budgets for this financial year and the next will be confirmed in October and a multi-year Spending Review will conclude in Spring 2025 to embed mission-led government and transform public services.
Addressing the House of Commons today (Monday 29th July) the Chancellor pledged to ‘restore economic stability’ after revealing £22 billion of unfunded pressures inherited from the previous Government.
Findings from a Treasury audit commissioned by the Chancellor expose billions of pounds of unfunded commitments from the previous Government, including the Rwanda scheme, the Advanced British Standard and the New Hospital Programme.
The previous Government also failed to increase Departmental budgets to cover public sector pay settlements, which were £11-12 billion higher than accounted for at the last Spending review. All of which were made on top of pressures resulting from higher inflation, increased asylum costs and funding for Ukraine.
Taking immediate action, the Chancellor announced £5.5 billion of savings this year and £8.1 billion next year to tackle the overspend. She also commits to set out full fiscal plans, alongside a Spending Review, at the Budget on 30th October.
Chancellor of the Exchequer, Rachel Reeves said: “This is not the statement I wanted to give today, and these are not the decisions I wanted to make. But they are the right decisions in difficult circumstances.”
The difficult decisions taken by the Chancellor have secured savings including over £1 billion next year, rising to over £4 billion by 29/30 by not proceeding with the previous government’s unfunded adult social care charging reforms.
Around £1.5 billion will be saved per year by targeting Winter Fuel Payments meaning households with someone aged over State Pension age receiving Pension Credit, Universal Credit, Income Support, income-based Jobseeker’s Allowance and income-related Employment and Support Allowance will continue to receive Winter Fuel Payments. This will better target support for heating costs at those who need it.
Immediate savings include £800 million this year and £1.4 billion next year from scrapping the Rwanda migration partnership and scrapping retrospection of the Illegal Migration Act, £70 million this year by cancelling the Investment Opportunity Fund and other small projects, £185 million next year from cancelling the Advanced British Standard and £785 million next year from stopping unaffordable road and railway schemes.
The Chancellor also announced a review of the underdelivering New Hospital Programme.
To provide certainty for public sector workers and help put an end to devastating strikes costing billions of pounds, the Chancellor accepted the independent Pay Review Body recommendations and confirm pay uplifts averaging 5.5% for public sector workers.
To ensure that no Government is faced with a spending cliff-edge like this again the Chancellor set out plans to ensure Spending Reviews are set every two years to cover a three-year period, with a one year overlap with the previous Spending Review, helping build in greater certainty and stability over public finances.
Transparency over in year spending pressures will also be enhanced, with more information being provided to the OBR. In the House the Chancellor also re-committed to a single major fiscal event a year.
The Chancellor also outlined long-term plans to tackle unacceptably high levels of welfare fraud and error as well as addressing falling public sector productivity and a new Office of Value for Money.
During her statement the Chancellor outlined next steps in delivering tax commitments from the manifesto, to provide taxpayers with certainty ahead of their final confirmation at the Budget.
This includes ending the VAT tax breaks for private schools from 1 January 2025 to help recruit 6,500 new teachers, as well as replacing the outdated non-domicile regime with a new internationally competitive residence-based regime.
As also set out in the manifesto, the Chancellor confirmed plans for the Energy Profits Levy to be extended one year to 31 March 2030, have its investment allowances tightened and to increase the rate of the levy by three percentage points to 38% from 1 November 2024.
A call for evidence confirming the government’s intention to take action on the carried interest loophole has also been published, as well as a commitment to update on policies at the Budget to help close the tax gap further.
Further details for all tax policies, including costings certified by the Office for Budget Responsibility, will be published at the Budget.
Chancellor of the Exchequer Rachel Reeves statement to the House of Commons on 29/07/2024:
Mr Speaker, on my first day as Chancellor of the Exchequer, I asked Treasury officials to assess the state of public spending.
That work is now complete, and today I am presenting it to this House.
In this statement, I will do three things.
First, I will expose the scale – and the seriousness – of what has been uncovered.
Second, I will lay out the immediate action we are taking to deal with the inheritance.
And third, I will set out our longer-term plans to fix the foundations of our economy.
Let me take each of these in turn.
First, the inheritance.
Before the election, I said that we would face the worst inheritance since the Second World War.
Taxes at a seventy year high.
Debt through the roof.
An economy only just coming out of recession.
Mr Speaker, I knew all those things.
I was honest about them during the campaign.
And the difficult choices it meant.
The British people knew them too.
That is why they voted for change.
But upon my arrival at the Treasury three weeks ago, it became clear that there were things I did not know.
[Redacted political content]
That is why we are today publishing a detailed audit of the real spending situation, a copy of which will be laid in the House of Commons Library.
I want to take the opportunity to thank Treasury officials for all their work in producing this document.
Let me explain what it has uncovered.
Mr Speaker, the government published its plans for day to day departmental spending at the Spring Budget in March.
But when I arrived at the Treasury…
… on the very first day…
… I was alerted by officials that this was not how much the previous government expected to spend this year.
Not even close.
In fact, the total pressure on these budgets across a range of areas was an additional £35bn.
Once you account for the slippage in budgets you usually see over a year…
… and the reserve of £9bn to deal with genuinely unexpected events…
… it means, Mr Speaker, that I have inherited a projected overspend of £22bn.
A £22bn hole in the public finances now – not in the future.
[Redacted political content]
If left unaddressed it would have meant a 25% increase in the government’s financing needs this year, pushing gilt issuance further into record highs outside of the pandemic.
So I will today set out the urgent work I have already done to reduce that pressure on the public finances by £5.5bn this year and over £8bn next year.
And let me be clear: I am not talking about bills for future years they signed up to but did not include, like the compensation for infected blood.
I am not talking about the state of public services in the future, like the crisis in our prisons, which they have left for us to fix.
I am talking about the money they were spending this year and had no ability to pay for…
[Redacted political content]
Resulting in the position that we have now inherited:
The reserve, spent three times over only three months into the financial year.
[Redacted political content]
Mr Speaker, the scale of this overspend is not sustainable.
Not to act is simply not an option.
We have already seen official ONS figures this month showing borrowing is higher this year than the OBR expected. [Redacted political content]
[Redacted political content]
There are very clear instances of specific budgets that were overspent…
… and unfunded promises that were made…
…but that, crucially, the OBR were not aware of for their March forecast.
I will now take each of those instances in turn.
First, the asylum system.
The forecast for the number of asylum seekers has risen dramatically since the last Spending Review, and costs for asylum support have risen sevenfold in the last three years.
But instead of reflecting those costs in the Home Office budget for this year, the previous government covered up the true extent of the crisis and its spending implications.
The document I am publishing today reveals a projected overspend on the asylum system, including their failed Rwanda plan, for this year alone of more than £6.4bn.
That was unfunded and undisclosed.
Next, in the wake of the pandemic, demand for rail services fell.
But instead of developing a proper plan to adjust for this new reality, the government handed out cash to rail companies to make up for passenger shortfalls, but failed to budget for this adequately.
Because of that, and because of industrial action, there is now an overspend of £2.9bn in the transport budget.
That was unfunded and undisclosed.
Mr Speaker, since 2022, the government – with the support of this whole House – has rightly provided military assistance to Ukraine in response to the Russian invasion.
The spending audit has found that there was not enough money set aside in the reserve to fund all these costs.
We will continue to honour these commitments in full.
[Redacted political content]
On top of these new pressures, since 2021, inflation was above the Bank of England’s target for 33 months in a row – hitting 11% at its peak.
But the government has not held a Spending Review since 2021.
That means they never fully reflected the impact of inflation in departmental budgets.
This had a direct impact on budgets for public sector pay.
When the last Spending Review was conducted, it was assumed that pay awards would be 2% this year.
Ordinarily, the government is expected to give evidence to the Pay Review Bodies on affordability.
But extraordinarily, this year, the previous government provided no guidance on what could or could not be afforded to the Pay Review Bodies.
This is almost unheard of.
But that is exactly what they did.
[Redacted political content]
I will not repeat their mistakes.
Where the previous government provided no transparency to the public, and no certainty for public services…
… we will be open about the decisions which are needed…
… and the steps we are taking.
That begins with accepting in full the recommendations of the independent Pay Review Bodies, and the details of these awards are being published today.
That is the right decision for the people who work in and most importantly the people who use our public services…
… giving hardworking staff the pay rise they deserve…
… while ensuring we can recruit and retain the people we need.
It should not have taken this long to come to these decisions.
And I do not want us to be in this position again.
So, I will consider options to reform the timetable for responding to the Pay Review Bodies in the future.
This decision is in the best interests of our economy too.
The last government presided over the worst set of strikes in a generation.
This caused chaos and misery for the British public.
And it wreaked havoc on the public finances.
Industrial action in the NHS alone cost the taxpayer £1.7bn last year.
That is why I am pleased to announce today that the Government and the BMA have agreed an offer to the Junior Doctors, on which my RHF the Health Secretary will set out further details.
And let me pay tribute today to my RHF, whose leadership on this issue has paved the way to ending a dispute which has caused waiting lists to spiral, operations to be delayed and agony for patients to be prolonged.
Today marks the start of a new relationship between the government and staff working in our National Health Service – and the whole country will welcome that.
Mr Speaker, where the previous government ducked the difficult decisions, I am taking action.
Because knowing what they did about the state of the public finances, they continued to make unfunded commitment after commitment that they knew they could not afford.
[Reacted political content]
Leaving us with an overspend of £22bn this year.
Where they presided over recklessness, I will bring responsibility.
I will take immediate action.
Let me set this out in detail.
First, pay.
I have today set out our decision to meet the recommendation of the Pay Review Bodies.
Because the previous government failed to prepare for these recommendations in departmental budgets, they come at an additional cost of £9bn this year.
So, the first difficult choice I am making is to ask all departments to find savings to absorb as much of this as possible…
… totalling at least £3bn.
To support departments as they do this, I will work with them to find savings ahead of the Autumn budget…
… including through measures to stop all non-essential spending, such as on consultancy and government communications.
And I am asking departments to find 2% savings in their back-office costs.
I will now deal with a series of commitments made by the previous government which they did not fund.
Because if we cannot afford it, we cannot do it.
First, [Redacted political content] the former Prime Minister announced the introduction of a new qualification: the “Advanced British Standard”.
That is a commitment costing nearly £200m next year, rising to billions in future years.
Mr Speaker, this was supposed to be the Prime Minister’s legacy.
But it turns out, he didn’t put aside a single penny to pay for it.
So we will not go ahead with that policy.
Because if we cannot afford it, we cannot do it.
Next, the Illegal Migration Act, passed by the previous government, made it impossible to process asylum applications or remove people who have no right to be here.
[Redacted political content]
We need a properly controlled and managed asylum system where rules are properly enforced so that those with no right to be here are swiftly removed.
So we have scrapped their failed Rwanda scheme, which placed huge pressure on the Home Office budget.
To bring down these costs as soon as possible, my RHF the Home Secretary has already laid legislation to remove the retrospective element of the Illegal Migration Act…
… which will significantly reduce the use of hotel accommodation.
These measures will save nearly £800m this year and avoid costs spiralling even further next year.
This was a bad use of taxpayers’ money and we will not do it.
Mr Speaker, the previous government claimed it was “levelling up” our country.
[Redacted political content]
At Autumn Statement last year, the former Chancellor announced nearly £150m for an “Investment Opportunity Fund”.
But not a single project has been supported from the Fund.
So, following discussions with my RHF the Deputy Prime Minister, I am cancelling it today.
The previous government also made a series of commitments on transport.
Promises that people expected to be delivered.
[Redacted political content]
We have seen from the National Audit Office the chaos that the previous government presided over.
Projects over budget and delayed again and again.
The spending audit has revealed nearly £800m of unfunded transport projects that have been committed next year.
So my RHF the Transport Secretary will undertake a thorough review of all these commitments.
As part of that work, she has agreed not to move forwards with projects that the previous government refused to publicly cancel, despite knowing full well they were unaffordable.
That includes proposed work on the A303 and the A27…
… and my RHF will also cancel projects in the “Restoring our Railways” programme which have not yet commenced.
If we cannot afford it, we cannot do it.
Mr Speaker, the previous government had plans for a retail sale of Natwest shares.
We intend to fully exit our shareholding in NatWest by 2025-26.
But having considered advice I have concluded that a retail share sale offer would involve significant incentives that could cost taxpayers hundreds of millions of pounds.
It would therefore not represent value for money, and it will not go ahead.
This is a bad use of taxpayers’ money and we will not do it.
Next, let me address the unfunded pressures in our NHS and our social care sector.
In October 2020, the government announced that 40 new hospitals would be built by 2030.
Since then, only 6 have started their main construction activity.
And less than half of the 40 hospitals have even started construction.
The National Audit were clear that delivery was wildly off track.
But since coming into office, it has become clear that the previous government continued to maintain its commitment to 40 hospitals…
… without anywhere close to the funding required to deliver them.
[Redacted political content]
We need to be straight with the British people about what is deliverable and what is affordable.
So we will conduct a complete reset of the New Hospitals Programme, with a thorough, realistic and costed timetable for delivery.
Mr Speaker, adult social care was also neglected by the previous government.
The sector needs reform to improve care and to support staff.
In the previous parliament, the government made costly commitments to introduce adult social care charging reforms.
But then, they pushed them back repeatedly…
… including just two years ago…
… because they knew that local authorities were not ready…
… and that their promises were not funded.
So it will not be possible to take forward these charging reforms. This will save over £1bn by the end of next year.
Mr Speaker, the previous government made commitment after commitment without knowing where the money was going to come from.
They did this repeatedly, knowingly and deliberately.
[Redacted political content]
And I am taking the first steps to clean up what they have left behind.
But the scale of the inheritance we have been left, means the decisions we have so far announced will not be enough. This level of overspend is not sustainable.
It therefore falls to us to take further difficult decisions on spending that generate in year savings.
Mr Speaker, the last Labour government lifted over one million pensioners out of poverty.
And I repeat today the commitment we gave that we will protect the Triple Lock.
But the scale of the situation we are dealing with means incredibly tough choices.
So that is why today, I am making the difficult decision that those not in receipt of Pension Credit will no longer receive the Winter Fuel Payment from this year onwards.
The Government will continue to provide Winter Fuel Payments worth £200 to households receiving Pension Credit…
… or £300 for households in receipt of Pension Credit with someone aged over 80.
Let me be clear: this is not a decision I wanted to make.
Nor is it one that I expected to make.
But it is a necessary and urgent decision I must make – It is the responsible thing to do to fix the foundations of our economy and bring back economic stability.
Alongside this change, I will work with my Right Honourable Friend the Work and Pensions Secretary to maximise the take up of Pension Credit by…
… bringing forward the adminstration of Housing Benefit and Pension Credit, pushed back by the previous government…
… and working with older peoples’ charities and local authorities to raise awareness of Pension Credit, and help identify households not claiming it.
Mr Speaker, this is the beginning of a process, not the end.
I am announcing today that I will hold a Budget on October 30th alongside a full economic and fiscal forecast from the Office for Budget Responsibility.
I have to tell the House that Budget will involve taking difficult decisions to meet our fiscal rules across spending, welfare and tax. [Redacted political content]
It will be a Budget to fix the foundations of our economy.
And it will be a Budget built on the principles that this new government was elected on.
First, we will treat taxpayers’ money with respect by ensuring that every pound spent is well spent…
… and we will interrogate every line of public spending to ensure it represents value for money.
Second, I can repeat – from the despatch box – our manifesto commitment that we will not increase National Insurance, the basic, higher, or additional rates of Income Tax, or VAT.
And today my Right Honourable Friend the Exchequer Secretary is publishing further detail on our manifesto commitments to close tax loopholes and clamp down on tax avoidance…
… to ensure we bring that money in as quickly as possible.
My third principle is that we will meet our fiscal rules.
We will move the current budget into balance…
… and we will get debt falling as a share of the economy by the end of the forecast.
These are the principles that will guide me at the Budget.
But let me be honest: challenging trade-offs will still remain.
So today I am also launching a multi-year Spending Review.
The review will set departmental budgets for at least three years, providing the long-term certainty that has been lacking for too long.
As part of that process, final budgets for this year and budgets for next year – 2025-26 – will be set alongside the Budget on 30th October.
I will look closely at our welfare system…
… because if you can work, you should work.
That is the principle of this government.
Yet under the previous government, welfare spending ballooned while inactivity has risen sharply in recent years.
So we will ensure the welfare system is focused on supporting people into employment…
… and we will assess the unacceptable levels of fraud and error in our welfare system, and take forward action to bring that down.
Mr Speaker, to fix the foundations of our economy, we must ensure that never again can a government keep from the public the true state of our public finances.
The fiscal framework which I have inherited had several flaws.
It allowed the government to run down the clock on departmental budgets…
… avoid difficult decisions
[Redacted political content]
So I am announcing the most significant set of changes to our framework since the inception of the Office for Budget Responsibility, which will come into effect this Autumn.
First, we have introduced legislation to ensure every significant and permanent tax or spending announcement must be accompanied by an OBR forecast through our “fiscal lock”, so we can never again see a repeat of the mini-budget.
Second, we will require the Treasury to share with the Office for Budget Responsibility its assessment of immediate public spending pressures, and enshrine that rule in the Charter for Budget Responsibility…
… so no government can ever again cover up the true state of the public finances.
And finally, we will ensure that never again do public service budgets get set at only a few months’ notice.
Instead, Spending Reviews will take place every two years, with a minimum planning horizon of three years, to avoid uncertainty for departments and to bring stability to the public finances.
I have already spoken to the Chair of the Office for Budget Responsibility to brief him on the findings of our audit and our reforms.
He has welcomed those, and will initiate his own review into the information provided to the OBR by the Treasury ahead of the Spring Budget. The Treasury stands ready to support this work.
Mr Speaker, by launching the Spending Review I am also today firing the starting gun on a new approach to public service reform to drive greater productivity in the public sector.
We will embed an approach to government that is…
… mission-led…
… that is reform driven, with a greater focus on prevention and integration of services, at both a national and a local level..
… and that is enabled by new technology, including through the work of my RHF the Secretary of State for Science, Innovation and Technology on the opportunities of AI to improve our public services.
And we will establish a new Office of Value for Money, with an immediate focus on identifying areas where we can reduce, stop or improve the value of spending….
… and we will appoint a Covid Corruption Commissioner, to bring back money owed to taxpayers after contracts worth billions of pounds were handed out by the previous government during the pandemic.
Ahead of the Spending Review, I will also review the cost of our political system, including restricting eligibility for ministerial severance payments based on time in office.
I expect all levels of government to be run efficiently and effectively and I will work with leaders across our country to deliver that.
That means effective local government …
… a civil service delivering good value for the British taxpayer…
… and reform of our political institutions, including the House of Lords, to keep costs as low as possible.
The Budget and Spending Review will also set out further progress on our number one mission: to grow our economy.
Because economic growth is the only way to sustainably improve our public services and sustainably improve our public finances.
So we will use the Spending Review to prioritise specific areas of capital investment that leverage in billions more in private investment.
It won’t happen overnight.
It will take time and it will take focus.
But we have already made significant progress.
Planning reforms to get Britain building.
A National Wealth Fund to catalyse private investment
A pensions investment review to unlock capital for our businesses.
Skills England to create a shared national ambition to boost skills across our country.
And work across government on a new industrial strategy…
… driven forward by a Growth Mission Board to ensure we deliver on our commitments.
We have fundamental strengths on which we can build.
And I look forward to welcoming business leaders to the International Investment Summit in Britain later this year.
Because I know that if we can create the stable conditions which investors need to thrive, we can build on the UK’s strengths and return confidence to our economy..
… so that entrepreneurs and businesses big and small know that this is a place to do business as that is the bedrock on which economic growth must be built.
Mr Speaker, the inheritance from the previous government is unforgiveable.
Chancellor to pledge to ‘fix the foundations of our economy’ as she unveils the spending inheritance left by the previous government.
Reeves to set out reforms to deliver economic stability and protect the public finances, as she announces date of Budget later this year.
Office of Value for Money formed to challenge government to deliver better value for money for taxpayers.
Chancellor of the Exchequer Rachel Reeves will this afternoon (Monday 29 July, after 3:30pm) vow to ‘fix the foundations of our economy’ as she publishes an audit of the spending inheritance left by the previous administration.
Accusing the previous government of ‘covering up the true state of the public finances,’ the Chancellor will announce immediate action to restore economic stability and deliver departmental savings this financial year.
The announcements will be a response to the findings of the Treasury’s spending audit, which shows that the previous government overspent this year’s budgets by billions of pounds after making a series of unfunded promises.
The Chancellor will confirm that she has commissioned an Office for Budget Responsibility forecast to coincide with a Budget and Spending Review to be held later this year.
The Budget will set out how the government’s robust fiscal rules will be met: balancing the current budget so that day-to-day costs are met by revenues and getting debt falling as a share of the economy by the fifth year of the forecast.
Speaking in the House of Commons later today, the Chancellor of the Exchequer Rachel Reeves is expected to say: “Before the election, I said we would face the worst inheritance since the Second World War.
“Taxes at a seventy year high. Debt through the roof. An economy only just coming out of recession. I knew all those things. I was honest about them during the election campaign. And the difficult choices it meant.
“But upon my arrival at the Treasury three weeks ago, it became clear that there were things I did not know. Things that the party opposite covered up from the country.”
She will add: “It is time to level with the public and tell them the truth.
“The previous government refused to take the difficult decisions. They covered up the true state of the public finances. And then they ran away. I will never do that.
“The British people voted for change and we will deliver that change. I will restore economic stability. I will never stand by and let this happen again.
“We will fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off.”
The Chancellor will announce she is committing the government to one major fiscal event per year to put an end to ‘surprise budgets’ which have previously caused uncertainty for both the markets and family finances across the country.
A new Office of Value for Money will be established, using pre-existing civil service resource, to put an end to wasteful spending in government, providing targeted scrutiny of public spending so that value for money governs every decision government makes.
The Office will immediately begin work on identifying and recommending savings for the current financial year, while also establishing where targeted reforms of the system can ensure that poor value for money spending is cut off before it begins.
Reforms bearing down on waste in the public sector will also be announced today, driving efficiency through government departments and arms length bodies (ALBs). Immediate action will be taken to stop non-essential spending on consultants, alongside disposing of surplus estates and hastening delivering admin efficiencies in departments.
Earlier this month, the Government introduced the Budget Responsibility Bill at the King’s Speech to deliver economic stability by guaranteeing that never again can a government play fast and loose with the public finances.
The Bill ensures all significant fiscal announcements on tax or spending which are worth more than 1% of the UK’s GDP will be subject to scrutiny by the independent Office for Budget Responsibility. This will guard against large-scale unfunded commitments in the future.
FORMER Tory Chancellor Jeremy Hunt said the new Labour government is ‘peddling nonsense’. He added: “The books were wide open and what they show is a healthy, growing economy.”
The Conservatives claimed throughout the recent election campaign that Rachel Reeves secretly plans to raise taxes.
Plans to reveal which new hospitals, surgeries and treatment centres will be built in Scotland have been delayed.
In a letter to Holyrood’s finance committee, Cabinet secretary for Finance and Local Government Shona Robison explained: ‘To provide as much certainty as possible to parliament and wider stakeholders of our capital investment plans, I must wait until I have confirmed capital allocations from the new UK government”.
That confirmation is not expected until late Autumn – and, given the new Labour government’s warnings about a £20 bn. ‘black hole in the UK’s finances, it’s not expected to be good news.
Lothian Conservative MSP, Miles Briggssaid: “This further delay to finding out if SNP Ministers will reinstate the funding for a new Princess Alexandra Eye Pavilion is extremely disappointing.
“We urgently need a new eye hospital to improve the delivery of ophthalmology across the South East of Scotland.
“The decision by SNP Ministers not to reverse funding for a new hospital has been a disastrous decision and will ultimately lead to additional costs for the delivery of a new hospital.
“I will continue to lead calls for the funding for a new eye hospital. What we desperately need is to see some leadership from SNP Ministers.”
Chancellor of the Exchequer Rachel Reeves to attend first G20 meeting in Rio de Janeiro
Reeves to bang the drum for British business on first international visit since taking office
First female Chancellor to champion the importance of female leadership in economics and finance
Chancellor of the Exchequer Rachel Reeves is in Rio de Janeiro, Brazil, to attend the G20 Finance Ministers and Central Bank Governors Meeting on her first international visit since taking office.
The Chancellor is meeting with G20 counterparts for the first time, where she will champion British business and declare the country is ‘open for business’ once again after years of uncertainty and instability.
The Chancellor will tell an international audience that the number one priority of the new British government is to deliver economic growth to make every part of the country better off. She will urge business leaders to “take another look at Britain” as she talks to the Government’s plans to boost international investment.
She will outline to leaders of world economies how she will always act in the national interest on major international issues, including climate change and support for Ukraine as Russia’s illegal invasion continues into its third year. The Prime Minister has already recommitted £3 billion per year of military support to the end of the decade or for as long as needed.
Rachel Reeves, Chancellor of the Exchequer, said: “Over the coming days my message to international leaders is simple: after years of uncertainty and instability, Britain is open for business once again.
“This new government’s number one mission is to boost economic growth so we can make every part of the country better off. That can only happen by working alongside business from around the world to encourage them to invest in the jobs and industries of the future.
“That is why over the coming two days I will be banging the drum for British business and urging leaders to take another look at us. I’m ready to take my seat at the table alongside fellow finance ministers, steering the world economy and representing our national interests on the major issues of our time, including grasping the growth opportunities of the net zero transition and putting pressure on Russia to end the war in Ukraine.”
Chancellor Reeves will also use her platform as the UK’s first woman Chancellor to champion the importance of female leadership in economics and finance, as she meets with other female leaders while at the G20.
Chancellor Reeves’ visit to Brazil is the latest step in the government’s national mission to grow the economy. Since taking office, she has pursued reform of the economy to fix its foundations and make every part of Britain better off, including announcing changes to the planning system, ending the ban on new onshore wind and launching a National Wealth Fund to catalyse private sector investment.
Brazil holds the presidency for the G20 this year, with a focus on social inclusion and the fight against hunger; energy transition and sustainable development; and reform of global governance. Ministers and governors will discuss the global economy, financial stability, international taxation, climate, and debt and development. The Chancellor will promote collaboration on issues including addressing inequality, driving growth and progressive taxation.
The UK and Brazil’s relationship is particularly strong in green finance, with Brazil raising $2 billion by listing its new sustainable sovereign bond on the London Stock Exchange. The UK government recently renewed its Memorandum of Understanding with the Brazilian Development Bank on cooperation on the green transition, in particular on green finance. Britain has also made £5 billion available in UK Export Finance funding to meet Brazil’s needs.
The Chancellor continued her drive for a new approach to growth underpinned by stability, investment and reform yesterday (23 July), as she chaired the first Growth Mission Board with ministers across government.
Rachel Reeves views the forum as vital in driving forward the Growth Mission, enabling her to work with her colleagues across government to boost productivity, deliver good jobs, and make everyone better off.
The Chancellor is focused on driving forward the Growth Mission, including the development a modern Industrial Strategy, in partnership with business, to remove barriers and provide key sectors with the clarity and certainty they need to seize growth opportunities
She will also work with ministerial colleagues to develop the English Devolution bill to strengthen local leadership and give new powers to metro mayors and combined authorities to deliver growth across the country, alongside improving the infrastructure planning regime to unlock investment and boost grid connections.
Tuesday’s meeting follows the immediate steps the government has taken to boost growth including announcing a series of planning reforms to get Britain building; removing the de facto ban on onshore wind; establishing the National Wealth Fund; announcing a Pensions Review to unlock growth, boost investment and deliver savings for pensioners; launching Skills England; and announcing the white paper on getting Britain working again.
The Growth Mission is the first of five missions proposed by the Government, each of which focus on ambitious, long-term objectives for the country.
Chancellor of the Exchequer Rachel Reeves said: ““Growth is our number one mission and in our first few weeks this Government is taking the tough decisions to deliver on that agenda.
“From planning reform and supporting our future industries to strengthening local leadership and forging ahead with new infrastructure, our work has just begun to fix the foundations so we can rebuild Britain and make every part of the country better off.”
Chancellor launches landmark review to boost investment, increase pension pots and tackle waste in the pensions system.
New Pensions Bill confirmed in King’s Speech could boost pension pots by over £11,000, with further consolidation and broader investment strategies to potentially deliver higher returns for pensions.
An investment shift in defined contribution schemes could deliver £8 billion of new productive investment into the UK economy.
Action will be taken to unleash the full investment might of the £360 billion Local Government Pension Scheme to make it an engine for UK growth.
The Chancellor Rachel Reeves has announced a landmark pensions review as part of the new Government’s mission to ‘boost growth and make every part of Britain better off’.
Under plans unveiled by the new Chancellor, billions of pounds of investment could be unlocked in the UK economy from defined contribution schemes alone and pension pots for savers in defined contribution schemes could be boosted by over £11,000.
The Review will also, working closely with the Minister of State at MHCLG, look at how to unlock the investment potential of the £360 billion Local Government Pensions Scheme, which manages the savings of those working to deliver our vital local services, as well as how to tackle the £2 billion that is being spent on fees.
The announcement comes ahead of the first Growth Mission Board on Tuesday. This will be chaired by the Chancellor and drive the Government’s work to achieve the highest sustained growth in the G7. New measures have already been announced to fix the planning system, the creation of a new National Wealth Fund and the overhaul of the listings regime to boost UK stock exchanges.
The work announced today – focusing on investment – is the first phase in reviewing the pensions landscape and will be led by the first ever joint Treasury and Department for Work and Pensions Minister, Emma Reynolds (Minister for Pensions). The next phase of the review starting later this year will consider further steps to improve pension outcomes and increase investment in UK markets, including assessing retirement adequacy.
The Chancellor and the Pensions Minister will chair a roundtable with the pensions industry on Monday to start intensive industry engagement for the Review.
Chancellor of the Exchequer Rachel Reeves said: “Despite a very challenging inheritance, this new Government is getting on with the job of delivering our mandate to get the economy growing so we can make every part of our country better off.
“The review we are announcing is the latest in a big bang of reforms to unlock growth, boost investment and deliver savings for pensioners. There is no time to waste. That is why I am determined to fix the foundations of our economy so we can rebuild Britain and improve people’s lives.”
Deputy Prime Minister Angela Rayner said: “After putting in years of hard graft serving their communities, the very least our frontline workers deserve – millions of whom are low paid, millions of whom are women – is dignity and security in retirement.
“That’s why we want to make sure their hard-earned money works harder for them so we ensure they receive the pensions they have earned, whilst unlocking growth across our economy.”
Pensions Minister Emma Reynolds said: “As the first ever joint Treasury and DWP Minister I am uniquely placed to tackle the twin challenges of productive investment and retirement outcomes.
“Over the next few months the review will focus on identifying any further actions to drive investment that could be taken forward in the Pension Schemes Bill before then exploring long-term challenges to ensure our pensions system is fit for the future.
“There is so much untapped potential in our pensions markets, with an industry worth around £2 trillion. The measures we have already set out in our Pension Schemes Bill will help drive higher investment and a better deal for our future pensioners.”
M&G plc CEO Andrea Rossi said: “A Pensions Review is long overdue and to be welcomed. M&G has a rich heritage of investing in the UK and there are significant opportunities ahead to give the real economy a boost over the next decade and beyond.
“We know from experience, through our PruFund offer, that a large pooled fund gives savers access to a wider range of productive assets that aims to maximise benefits over the long-term. Consolidation, combined with the role of advice, has huge potential to align the interests of savers with the UK’s growth ambition. We look forward to supporting the Government on this landmark review.”
BVCA Chief Executive Michael Moore said: “We are very encouraged that the Government has brought forward their Pensions Review so quickly.
“The Chancellor has a real opportunity to deliver economic growth by facilitating increased investment in UK businesses to the benefit of returns to pension savers as well as the wider economy.
“Legislative and policy changes, including further consolidation of pension schemes to increase pension schemes’ ability to deploy capital into UK private capital funds are vital, as is greater industry partnership.
“The BVCA’s Investment Compact has already brought together over 100 growth equity and venture capital firms committed to working with pensions schemes to consider effective structures that attract investment.”
Defined contribution schemes will be managing around £800 billion in assets by the end of the decade and the Review will explore ways to increase their investment into productive assets. Even a 1 percentage point shift of assets into productive investments could mean £8 billion of new productive investment to grow the economy and build vital infrastructure by the end of the decade.
This would also help savers using these schemes build up better retirement pots as productive assets are more likely to provide higher returns. Immediate action has already been taken to boost retirement savings through the Pensions Bill, which introduces a Value for Money Framework to promote better governance and achieve higher returns – boosting the pension pot of an average earner who saves over their lifetime in a defined contribution scheme by over £11,000.
The first stage of the review will examine actions to support greater productive investment and better retirement outcomes, including through further consolidation and encouraging at-scale schemes to increase returns through broader investment strategies.
The Local Government Pension Scheme (LGPS) in England and Wales is the seventh largest pension fund in the world, managing £360 billion worth of assets. Its value comes from the hard work and dedication of 6.6 million people in our public sector, mostly low-paid women, working to deliver our vital local services. Pooling this money would enable the funds to invest in a wider range of UK assets and the government will consider legislating to mandate pooling if insufficient progress is made by March 2025.
To cut down on fragmentation and waste in the LGPS, which spends around £2 billion each year on fees and costs and is split across 87 funds – an increase in fees of 70% since 2017, the Review will also consider the benefits of further consolidation.
The first stage of the review will report in the next few months and consider further measures to support the Pensions Bill. It will take account of the need to prioritise gilt market stability, liquidity and diversity. It will then broaden out to consider the wider pensions landscape to strengthen security in retirement. In the meantime, immediate action has been taken through new laws announced to Parliament in The King’s Speech.
Barclays CEO C. S. Venkatakrishnan said: “We welcome the Government’s timely review of the pensions sector.
“Pensions reforms are critical to unlocking institutional investment in growth equity, and alongside a streamlining of listing requirements, will give a significant boost to UK capital markets and growth. Building institutional demand is also an important signal in encouraging private share ownership.
Border to Coast CEO Rachel Elwell said: ““Our focus is on delivering a strong and sustainable LGPS to enable it to pay the pensions of the 6.6million local government workers in an affordable manner.
“Border to Coast has developed innovative and cost-effective investments, while cutting Private Market fees by almost 30%. There is an opportunity to build and expand on this, delivering greater value to local taxpayers, and delivering productive investment in the UK. We therefore welcome the opportunity to work with the Government on a co-ordinated review to deliver this.
“If the Government is ambitious and considers a wide range of options in this review we are optimistic that this will deliver the clear roadmap we have called for, building on the work of the BVCA’s Pensions and Private Capital Expert Panel.”
Chair of the Pensions & Private Capital Expert Panel and co-founder of IQ Capital Kerry Baldwin said: “An early and ambitious review of the pensions landscape is an extremely important step in prioritising returns for UK savers and driving economic growth.
“The Chancellor’s Pensions Review will add further impetus to the work of the Investment Compact for Venture Capital and Growth Equity, which has brought together the private capital and pensions industries to support pension savers and to encourage investment from pension funds into unlisted equities.
“There has been significant progress through this collaboration. We are already developing a greater understanding of the ways we can work together to deliver new options for UK pension savers at the same time as supporting high growth, innovative UK companies with new sources of capital.
“The Review offers us the opportunity to develop this shared agenda further and deliver better outcomes for all the stakeholders.”
TheCityUK CEO Miles Celic said: “Creating the right investment environment is critical both for improving people’s retirement incomes and for boosting growth across the UK.
“The government’s new Pensions Review will be an important mechanism to help deliver this. We look forward to working closely with government and regulators to ensure that an effective long-term strategy that supports financial resilience is developed.”
Chancellor pledges she will take action to fix the foundations of the economy to make everyone, not just a few, better off.
Government to get Britain building by taking immediate action on planning reform and unblocking stalled sites to unlock thousands of homes.
Immediate removal of the de facto ban on onshore wind in England as government starts delivering on clean energy mission to cut bills for families and boost energy independence.
The Chancellor yesterday (8 July) promised to take immediate action to fix the foundations of the economy, rebuild Britain and make every part of the country better off.
In her first speech as Chancellor, Rachel Reeves pledged to leaders of some of the UK’s pioneering industries to build growth on strong and secure foundations built on stability, investment and reform, and forged through a new partnership with the private sector.
Addressing the difficult economic inheritance this government faces, she committed to taking immediate action to drive sustained economic growth, the only route to improving the prosperity of our country and the living standards of working people.
Setting out her first steps to deliver on the government’s commitments in its manifesto that every action it takes will be based on sound money and economy stability, the Chancellor promised a new economic model that will grow the economy and keep taxes, inflation and mortgages as low as possible.
The Chancellor said had the UK economy grown at the average rate of OECD economies over the fourteen years from 2010, it would be £143.3 billion larger – worth £5,053 for every household in the country. This could have brought in an additional £58 billion in tax revenues in the last year alone to sustain our public services.
Taking decisive action, the government is today announcing a series of measures to lay the foundations for a dynamic, modern and growing economy, including taking urgent steps to build 1.5 million homes over the next five years and the immediate removal of the de facto ban on onshore wind in England, as part of its clean energy mission.
Chancellor of the Exchequer Rachel Reeves said:“Today I am taking immediate action to fix Britain’s economic foundations.
“By growing our economy we can rebuild Britain and make every part of the country better off.”
Deputy Prime Minister Angela Rayner said: ““Our country is under new management and a new era for economic growth will be built on secure foundations.
“The Chancellor and I will work in lockstep to kickstart the economy, unleashing housebuilding and powering local growth.
“Change starts now. We will unblock the bottlenecks and drive forward a transformational package to build the homes people need.”
Energy Security and Net Zero Secretary Ed Miliband said:“Every family has paid the price of the ban on onshore wind farms in higher energy bills. This ban has undermined our energy security, put costs on people’s bills – especially those on lower incomes – and held us back in our fight against climate change.
“This Government is wasting no time in delivering the bold plan we need to take back control of our energy; boosting our energy independence and cutting bills for families as we tackle the climate crisis.
“Getting rid of this ban and giving priority for planning permission for much needed infrastructure sends an immediate signal to investors here and around the world that the UK is back in business, an immediate step in our mission to make Britain a clean energy superpower.”
The UK government is taking swift action on its central growth mission by announcing the following:
Planning
The government is taking swift action to identify and unblock key ‘stalled sites’ to get large housing schemes moving forward, starting with four sites across England to unlock over 14,000 homes: Liverpool Central Docks, Northstowe, Worcester Parkway and Langley Sutton Coldfield.
The Chancellor has also welcomed the Deputy Prime Minister’s commitment to make the economic benefit of development a central consideration when intervening in the planning system. This starts today by recovering two appealed planning applications for data centres in Buckinghamshire and Hertfordshire.
To facilitate this new approach, the Deputy Prime Minister will also write to local mayors and the Office for Investment to ensure that any investment opportunity with important planning considerations that comes across their desks is brought to her attention and to the Chancellor’s.
This will help to ensure the planning system can unlock major schemes from clean energy projects and transport infrastructure to film studios and art-entertainment venues.
The Chancellor has also confirmed that the government will support local authorities with 300 additional planning officers across the country.
Further announcements will be made in the coming weeks to accelerate the development of housing and infrastructure, including launching a landmark consultation on an updated, growth-focused National Planning Policy Framework to include mandatory housing targets and a requirement to review greenbelt boundaries where necessary to meet them.
These will prioritise Brownfield and “grey belt” land for development to meet housing targets where needed, partnered with new ‘golden rules’ that will make sure the development this frees up will also deliver thousands of affordable homes, including more for social rent.
Critical major infrastructure
The current planning regime acts as a major brake on economic growth which is why the government will make the changes the country needs to forge ahead with new roads, railways, reservoirs, and other nationally significant infrastructure.
The government will set out new policy intentions for critical infrastructure in the coming months, ahead of updating relevant National Policy Statements within the next 12 months to provide certainty to industry. We will legislate to ensure they are updated at least every 5 years.
The government will also build on the Strategic Spatial Energy Plan which is being developed by the National Energy System Operator to speed up the roll out of clean power, and will seek to expand the use of spatial planning to other infrastructure sectors.
The Chancellor has asked the Secretaries of State for Transport and Energy Security and Net Zero to prioritise taking decisions on critical infrastructure projects which are with them now.
To go further, to help speed up delivery on infrastructure such as transport and energy, the government will review how it can unlock critical infrastructure, without weakening environment protections.
Alongside this, the government will make sure energy projects are prioritised in the planning system and consult on including onshore wind power developments in the Nationally Significant Infrastructure Projects (NSIP) planning regime.
Further details on ending the de facto ban on onshore wind will be set out later by the Department for Energy Security and Net Zero, and the Department for Levelling up, Housing and Communities.
Martha Lane Fox, President of the British Chambers of Commerce, said:“Fixing the foundations of the economy can provide businesses with the stability and certainty they need to unleash a wave of investment to create growth and new jobs.
“Labour’s pledges to create an industrial strategy, improve trade relations with the EU, and boost skills training all have capacity to make a huge difference.
“Today’s commitment to deliver large scale infrastructure at greater pace, especially green energy projects and more housing where people want to live, is very welcome.
“But policy must be backed up with better skilled and resourced planning departments to deliver this step change. That’s why the pledge to fund an extra 300 planning officers is so important.
“It’s also why the BCC’s Planning Skills Fund has been set up in partnership with Government. It will develop an additional pipeline of new and upskilled planning talent to boost growth in our local economies.”
David Thomas, Chief Executive Officer, Barratt Developments’ said:“We welcome the Government’s commitment to reform of the planning system and their drive for growth.
“Building more new homes will bring huge economic and social benefits to the UK, and it is vital that local and central government are united with industry to plan positively to deliver high quality new homes and developments across the country.”
Keith Anderson, Chief Executive Officer, Scottish Power said:“I welcome the clear sense of urgency and direction set out by the Chancellor today.
“Prioritising clean energy infrastructure and building at speed and at scale will unleash strong economic growth across the country.
“If the UK can halve the time it takes to get renewables, electricity grid and storage projects through the planning system, we’ll look to double our investment over the coming years.”
Henrik L. Pedersen, Chief Executive Officer, Associated British Ports said:“Associated British Ports has an ambitious project pipeline of major investments in port infrastructure including supporting the development of floating offshore wind in Wales as well as green hydrogen and carbon capture and storage in the Humber.
“The right enabling measures from Government will unlock these developments at pace. In this regard the Chancellor’s speech is very welcome and encouraging.”
Mark Reynolds, Chairman & Chief Executive Officer, Mace Grop, Co-Chair of the Construction Leadership Council said:“Today’s announcements show a welcome proactive approach to tackling the delays to the planning system that are costing the UK up to £11bn a year in growth and hampering the delivery of the homes and infrastructure we sorely need.
“The focus on cutting the red tape to progress nationally important projects, such as data centres, combined with increased resourcing of the planning departments, will bring a renewed energy and focus to the construction sector.
“It’s particularly welcome to see the Chancellor has put this at the top of her agenda – we stand fully behind the delivery of the Government’s ambitions.”
Kate Kenny, Senior Vice President, Jacobs said:““We greatly welcome the changes outlined by the Chancellor today to simplify the planning regime and unlock greater investment in critical national infrastructure projects.
“The updating of National Policy Statements will also play a major role in providing clarity and certainty of pipeline for industry and its supply chains to invest in the long-term skills required to deliver the clean energy, transport, water and other significant infrastructure projects that the UK requires for a prosperous future.”
Tom Glover, UK Country Chair, RWE said:“We fully support the new government’s focus on unblocking the planning system, and welcome commitments to prioritise taking decisions on critical national infrastructure projects as soon as possible.
“Ensuring that local authorities are properly resourced to deliver a real acceleration in planning approvals is also crucial – we therefore welcome the announcement to fund an additional 300 planning officers.
“As a leading renewables developer we are also pleased that the government are moving swiftly to end the ban of onshore wind, in the long-term this means committing to bring projects over 50MW back into the Nationally Significant Infrastructure Projects (NSIPs) regime. We look forward to further information on this in due course”.
Andrea Rossi, Chief Executive Officer, M&G said:“As a major investor in the real economy we welcome efforts to provide long-term policy certainty and the ambition to get Britain building. Speed and ambition are crucial.
“By providing clarity on infrastructure priorities, combined with a swifter planning system, we can deliver investment, kick-start the economy and secure good returns for UK pension policy holders.”
Chris Cummings, Chief Executive Officer, The Investment Association said:“The Investment Management industry strongly supports the Chancellor’s ambition to drive economic growth. There is more our industry can do to support the UK economy and its people, and we are ready to work with the new government to achieve this.
“Investment is the engine of economic growth, and our industry supports the government in finding innovative ways for more capital to be channelled into thriving British businesses and infrastructure projects. Removing blockers in the planning system will be key to this.
“It is vital we open straightforward ways for pension funds to invest in the housing, transport and energy projects we all rely on by removing regulatory obstacles and overturning the culture of “safetyism” that has curtailed economic growth.”
Rob Perrins, Chief Executive Officer, Berkeley Group said: “We’re hugely encouraged to see the clear priority and focus on housing delivery as part of the Government’s mission for growth.
“Today’s announcements are a very positive start and we will continue to work closely with Government to help unlock the potential of brownfield regeneration sites to deliver good green homes, both affordable and private. Reviving urban land has a vital role to play in driving the sustainable growth and productivity our country needs.”
Nick Jansa, Executive Managing Director EMEA, Ontario Teachers’ Pension Plan said:“We welcome the government’s announcement today on improvements to the planning system and removing barriers to investment in growing the UK’s critical infrastructure.”
Chancellor Rachel Reeves will vow to “fix the foundations of Britain’s economy” to make every part of Britain better off.
In her first major speech, the Chancellor will declare economic growth is “a national mission” and promise to take the tough decisions to deliver on the Government’s mandate.
She is expected to announce swift changes to unblock infrastructure and private investment.
The Government will take the difficult decisions to deliver growth, Rachel Reeves will say in her first speech as Chancellor today.
Business leaders from some of Britain’s most pioneering industries – including its financial services and green industries – are expected to be in attendance in central London to hear Ms Reeves vow to “fix the foundations of our economy so we can rebuild Britain and make every part of our country better off.”
Rachel Reeves will say there is “no time to waste” on delivering change, pledging to reverse “the legacy of fourteen years of chaos and economic irresponsibility”.
The Chancellor is expected to say:““Last week, the British people voted for change. And over the past 72 hours I have begun the work necessary to deliver on that mandate.
“Our manifesto was clear: ‘Sustained economic growth is the only route to improving the prosperity of our country and the living standards of working people.’
“Where governments have been unwilling to take the difficult decisions to deliver growth – or have waited too long to act – I will deliver.
“It is now a national mission. There is no time to waste.
“This morning I want to outline the first steps this new government has taken to fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off.
“We face the legacy of fourteen years of chaos and economic irresponsibility.
“New Treasury analysis I requested over the weekend exposed the opportunities lost from this failure.
“Had the UK economy grown at the average rate of OECD economies since 2010, it would have been over £140 billion larger.
“This could have brought in an additional £58 billion in tax revenues last year alone to sustain our public services.
“It falls to this new Government to fix the foundations.”
Chancellor of the Exchequer Rachel Reeves’ speech delivered to HM Treasury staff yesterday (Friday 5 July):
Thanks to all of you for being here. It is such an honour to be here today as the Chancellor of the Exchequer.
I know what a responsibility this brings – to guide our economy through uncertain times;
To restore stability in an age of insecurity;
To build prosperity that draws on the talents of working people.
The central mission of this new Government will be to restore economic growth.
During the election that was the Labour Party’s mission.
It is now our national mission.
And it will be for the Treasury to lead that mission.
Not growth for growth’s sake.
But growth for a purpose.
To make every part of our country better off.
To deliver on this mission, I want this to be the most pro-growth Treasury in our country’s history.
That will mean doing what the Treasury does best – building growth on a rock of economic stability.
But it also means taking on new challenges and new responsibilities.
To fix the foundations.
And to rebuild Britain;
To drive growth not just in a few pockets of our country but in every part of Britain.
To meet the challenges and seize the opportunities of the future – including our energy transition.
That is why this Treasury will play its full part in a new era of industrial strategy;
Working hand-in-glove with business, to make sure Britain is truly open to business once again.
And I know that in an uncertain world, if we can deliver the stability, investment and reform that the Prime Minister and I have set out, then Britain can reap the rewards.
But for families at home – I know that this is about more than just lines on a graph.
It is about tackling the causes of the cost of living crisis and making work pay.
Rebuilding our health service and our schools.
And driving opportunity in every part of Britain.
I will always hold in my minds eye the people across our country whose livelihoods, public services and aspirations will rise or fall based on the decisions we make here.
And I ask you to do the same – whether in Darlington, or Norwich, or in this building.
It is also a huge privilege to be the first ever female Chancellor of the Exchequer.
So every young woman and girl watching this:
Let today show that there should be no ceilings on your ambitions.
Your hopes,
or your dreams.
But there is a deeper responsibility too:
To women whose work is too often undervalued.
Who have borne the brunt of inequality.
And whose lives and interests are too often excluded from economic policymaking.
Together, we are going to change that.
Now, I have been a Member of Parliament for fourteen years now.
And if I’m honest, I’ve spent a lot of those years frustrated.
Talking, not doing.
Responding to constituents’ problems, but not being able to get to the root cause of those problems.
So as far as I’m concerned, there is no time to waste.
I will judge my time in office a success if I know that, at the end of it, there are working-class kids from ordinary backgrounds living richer lives, their horizons expanded, and their potential realised;
If we are leaving to the next generation a country that is more prosperous, with more good jobs paying decent wages, and a country better able to thrive in an uncertain world.
I know that a lot has been asked of you in the last few years – and I know, when the chips are down, staff at the Treasury have risen to the occasion, from furlough to energy price support.
I have often disagreed with the political choices that have been taken in this building.
But I have never been in any doubt about the talent, the dedication and the professionalism that Treasury staff have displayed.
I know too that at times it must have been frustrating for you, working under a weight of uncertainty, changes in direction, and without clarity of political purpose.
As Chancellor, I am determined to change that.
All our plans for government will rely on your hard work.
I’m under no illusion about the scale of the challenges we face.
The difficult choices that we will have to make.
I am not promising you that it will be easy.
There is a long road ahead.
It comes with a great weight of responsibility.
I embrace it.
It will demand hard work.
I am ready for it.
The British people have put their trust in this new government.
They have put their trust in us to run their economy.
