LONDON — UK Finance Minister Rachel Reeves said on Friday 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 stressed that improving the living standards of ordinary Britons and increasing investment in public services depend on wealth creation.
“This will be the most pro-growth, pro-business Treasury this country has ever seen,” Reeves, the Chancellor of the Exchequer, told CNBC’s Steve Sedgwick in a remote interview.
“I will work with businesses to ensure we are doing everything we can to generate wealth and attract business investment into the UK economy,” he added.
Reeves, who took office three weeks ago after the Labour Party’s decisive victory in the July 4 general election, spoke from Rio de Janeiro, where he is attending the G20 finance ministers’ meeting.
The Chancellor mentioned meetings with business leaders interested in operating in the UK, but acknowledged that companies need greater clarity on taxation.
On Monday, Reeves will present the results of a Treasury audit that is expected to reveal a £20 billion ($25.7 billion) shortfall in public finances.
The announcement could set the stage for a tax-hike fall budget, marking the new government’s first significant fiscal event. The budget plan will also be announced on Monday.
Reeves refrained from discussing specifics, saying “tax issues are rightly a budget issue.” However, she stressed 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 sources of funding. The main mission of this new government is to grow the economy and, to do that, we need to attract wealth creators to Britain,” he said.
“We can’t tax and spend our way to greater growth and prosperity. We need to attract business investment to do that.”
Reeves has previously ruled out increases in income tax, national insurance, VAT or corporation tax, the government’s main sources of revenue. However, he faces a delicate balancing act, given his party’s commitments to increasing domestic investment and public sector wages.
Prime Minister Keir Starmer signalled on Wednesday that tough fiscal choices were inevitable, telling parliament that his government was facing “a bigger crisis than we thought” as it examined the accounts of the last 14 years of Conservative rule.
The center-left leader has promised a rigorous 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 commitment 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.
Economic measures previously announced by the government include the nationalization of railway operators, the creation of a public clean energy company, further investment in public services and the creation of new housing.
The G20 meeting marks a jump start for the new finance minister, who has signalled an opportunity to “reset” some of Britain’s relationships with international counterparts.
The comments are in line with similar statements made by Starmer at the European Political Community summit last week, aimed at distinguishing his administration from the UK’s previous leadership.
