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LONDON — On Friday, UK Finance Minister Rachel Reeves declared that the newly elected Labour government aims to be the most growth-oriented and business-friendly administration the country has ever seen.
In an interview with CNBC, Reeves emphasized that enhancing living standards for ordinary Britons and increasing public service investments hinge on wealth creation.
“This will be the most pro-growth, pro-business Treasury this country has ever seen,” Reeves, the Chancellor of the Exchequer, stated to CNBC’s Steve Sedgwick during a remote interview.
“I will collaborate with businesses to ensure we are doing everything possible to generate wealth and attract business investment into the UK economy,” she added.
Reeves, who assumed office three weeks ago following the Labour Party’s decisive victory in the July 4 general election, spoke from Rio de Janeiro, where she is attending the G20 finance ministers’ meeting.
The chancellor mentioned meetings with business leaders interested in operating in the UK, yet she acknowledged that companies require greater clarity on taxation.
On Monday, Reeves will present the findings of a Treasury audit anticipated to reveal a £20bn ($25.7bn) deficit in public finances.
This announcement could set the stage for a tax-increase autumn budget, marking the new government’s first significant fiscal event. The budget plan date will also be disclosed on Monday.
Reeves refrained from discussing specifics, stating that “tax issues are rightly a budget matter.” However, she emphasized her goal of maintaining a “competitive tax system.”
“I want taxes to be as low as possible, but unlike the previous government, I will not make promises I cannot keep without specifying the funding sources. The primary mission of this new government is to grow the economy, and to achieve that, we need to attract wealth creators to Britain,” she said.
“We can’t tax and spend our way to greater growth and prosperity. We need to attract business investment to achieve that.”
Reeves has previously ruled out increases in income tax, national insurance, VAT, or corporation tax, the government’s primary revenue sources. However, she faces a delicate balancing act, given her party’s commitments to increasing domestic investment and public sector pay.
Prime Minister Keir Starmer indicated on Wednesday that difficult fiscal choices are inevitable, telling Parliament that his government faces “a bigger crisis than we thought” as it reviews the accounts from the past 14 years of Conservative rule.
The center-left leader has pledged a strict approach to public spending until the country’s finances are stabilized. On Tuesday, he suspended seven party members who opposed his proposal to eliminate the spending cap on child benefits for two children.
Labour’s dedication to restoring the country’s economic growth was reiterated as a “core mission” in the King’s Speech last week, as the nation grapples with a cost-of-living crisis.
Previously announced economic measures by the government include the nationalization of rail operators, the establishment of a public clean energy company, further investment in public services, and the creation of new housing.
The G20 meeting signifies an early departure for the new finance minister, who has indicated an opportunity to “reset” some of Britain’s relationships with international counterparts.
These comments align with similar statements made by Starmer at the European Political Community summit last week, aiming to distinguish his administration from the UK’s previous leadership.
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