Sat, 22 Mar 2025

Sat, 22 Mar 2025 Rachel Reeves: I will not 'tax and spend'

In an interview with the BBC's Laura Kuenssberg, the chancellor opened up on the public finances and how she's finding the job.
Chancellor Rachel Reeves has ruled out increasing taxes and government spending, despite rising borrowing costs and pressure from Labour MPs. She said that "tax and spend" policies are no longer viable due to changing economic circumstances. The Chancellor's Spring Statement next week will focus on making cuts to some government departments to meet her self-imposed rules for the economy. Reeves warned in a BBC documentary that the UK cannot afford the same level of spending as during the last Labour government, when the economy was growing more strongly. However, Labour grandee Lord Blunkett has called for Reeves to "loosen" her fiscal rules to allow for more spending on public services and benefits. The Chancellor's plans have been criticized by Shadow Chancellor Mel Stride, who said that growth is down, inflation is up, and business confidence has collapsed since the Budget. The Treasury has reiterated its commitment to reducing borrowing and getting debt falling as a share of the UK economy by 2029-30. Reeves' Spring Statement will also provide more detail on the impact of recent welfare changes, including cuts to disability and health benefits, as well as top-up payments for universal credit claimants under 22. The Chancellor is expected to announce further cuts to Whitehall departments to meet her economic targets. The latest figures show that government borrowing was £10.7bn in February, higher than predicted, while growth forecasts are likely to be cut. The Treasury's fiscal rules have been described as "non-negotiable", but Lord Blunkett has called for them to be relaxed to allow for more spending on public services and benefits.
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