Chancellor of the Exchequer Rachel Reeves will deliver a speech to business leaders and senior stakeholders at the Treasury in London on 8 July 2024, announcing the first steps the new Labor government will take to deliver economic growth step.
Jonathan Brady | AFP | Getty Images
LONDON – Britain’s new chancellor of the exchequer outlined a series of measures on Monday to revive Britain’s flagging economic growth and address a national housing shortage.
In her first major speech, new finance minister Rachel Reeves said: “I have repeatedly warned that whoever wins the election will endure the worst conditions since the Second World War. What I have seen in the past 72 hours The situation arrived only confirmed this.
The former Bank of England economist was appointed Britain’s first female chancellor of the exchequer (the equivalent of a finance minister) on Friday as new Prime Minister Keir Starmer appointed his first cabinet. Before her first speech, she Promote economic growth It is both a party priority and a “national mission”. She is not expected to deliver her first state budget until the fall, and said Monday she would release a clear timeline “in due course.”
Reeves added that she had instructed Treasury officials to carry out a review of the UK’s spending position inherited from the previous Conservative government, and she aimed to submit the review to parliament before the summer recess.
Housing and planning were central topics in Reeves’ speech Monday:
“First, we will reform the national planning policy framework and consult on a new growth-focused approach to the planning system by the end of this month. This includes reinstating mandatory housing targets. From today we will end the ridiculous ban on new projects on land ban.
“We will get Britain building again. We will get the British economy growing again. There is no time to waste,” Reeves added.
Homebuilding has become a priority for the Labor government, which is trying to break through the red tape that has long strangled housing supply and bloated the country’s property market. A total of 212,570 new homes were completed last year under the Conservative government. According to government datawhile the Resolution Foundation think tank in late March established UK households receive “a product that is inferior both in quantity and quality”, although “quality-adjusted prices for housing in the UK are the highest of any advanced economy compared with our overall price level”.
Shares in housebuilders rose on Friday as Labor’s victory last week was expected to reignite planning momentum. previous factions Commitment Build 1.5 million new homes (300,000 a year) and reiterate its target Latest election manifestowielding it without “being afraid to use the full power of intervention where necessary to build the homes we need”.
Some see the target as a tall order, with previous governments mostly failing to deliver on similar promises. Hugo Bessis, senior economist for cities and regions at Capital Economics, said in a recent report that housing reform is “really complex because, although it is seen as a national challenge, The problem is largely local.”
“For politicians, this means that change often encounters a lot of resistance,” he said.
Reeve’s comments come as Britain recovers from a shallow recession in the second half of last year and a period of economic uncertainty following Brexit, the Covid-19 pandemic and international inflationary pressures following Russia’s invasion of Russia. War in the Middle East has resumed. London has also been struggling to regain its luster as a global financial center amid a lack of new IPO listings.
“In a world of uncertainty, Britain is the place to do business,” the new finance minister promised on Monday. “I know that many businesses have been looking at the UK over the past few years and wondering whether we are a safe haven for investment. I hope that will change and, with me as chancellor, I am sure they will.”
Labor faces bleak economic prospects in the short term – Office for Budget Responsibility expect GDP will grow by only 0.8% this year and will grow by 1.9% in 2025. project Growth this year was weaker at 0.5%. Given the outlook, public sector net debt excluding public sector banks stood at 99.8% of GDP as of end-May, According to official data.
“Our priority is to deliver the highest sustained growth in the G7 and deliver good jobs and productivity across the country,” Reeves said in his speech.
In its 135-page manifestoThe current ruling party has vowed to achieve “wealth creation” and raise 7.35 billion pounds ($9.42 billion) by 2028-29 to fund public services by further closing tax loopholes. It also plans to set up a £7.3bn national wealth fund to finance steel, cars, carbon capture technology and gigafactories.
As part of wider monetary policy, she confirmed the new Labor government has no current intention to change the way the Bank of England’s reserves are treated or the interest they accrue.
