Rachel Reeves, the new Chancellor, spoke this afternoon in her first speech outlining her plans for the UK economy, including tax reforms and housing projects.
Chancellor Reeves wasted no time in addressing the dire state of the UK economy. She revealed that in her first 72 hours in office, she discovered the situation was even worse than anticipated. According to Treasury analysis, the UK economy would have been £140 billion larger, with £58 billion more for public services, if it had grown at the average rate of OECD economies over the past 14 years. Reeves attributed this economic stagnation to "14 years of chaos and economic irresponsibility" under previous Tory governments.
She is committed to boosting economic growth and has taken a firm stance on tax reforms. She criticised the previous Conservative government for being part of an "anti-growth coalition" and expressed her determination to create a pro-business and pro-growth environment. Reeves aims to restore confidence among businesses and encourage investment in the UK. Her vision for economic success includes ensuring that working-class children from ordinary backgrounds have more opportunities and that high streets and town centers are revitalised.
Addressing the housing crisis she confirmed Labour's commitment to building 1.5 million new homes by the next election. This ambitious plan involves an overhaul of planning rules that have hindered housing development. New developments will be permitted on certain parts of the green belt, following a review of boundaries by local authorities. The government will prioritize brownfield and grey belt land for house-building, including affordable housing and housing for social renters. Additionally, 300 new planning officers will be hired to expedite decision-making processes.
There will be significant changes to infrastructure project approvals. Major infrastructure decisions will now be made nationally rather than locally to prevent important projects from being delayed by red tape. A new taskforce will be established to accelerate progress on stalled housing sites, such as those in Langley Sutton Coldfield, Liverpool central docks, Northstowe and Worcester Parkway.
In a move to promote green energy, the Starmer's new government has lifted the effective ban on onshore wind projects. Under the previous Conservative administration, wind farms faced stringent restrictions, but Reeves highlighted that onshore wind is one of the cheapest forms of green energy. By doubling onshore wind capacity and transforming the grid to clean energy by 2030, the government aims to reduce emissions and dependence on expensive gas.
One of the most anticipated aspects of her speech was the announcement regarding the next major Budget. She indicated that a date for the Budget would be set before the summer break, with the Budget likely to be presented in the Autumn. Reeves emphasised the importance of doing things properly, stating that the Office for Budget Responsibility (OBR) would produce detailed forecasts for her Budget. This approach contrasts sharply with Liz Truss's refusal to use OBR forecasts for her mini-budget in 2022, which led to economic turmoil.