The upcoming budget, which will be the first under the new government, has been confirmed for 30 October by chancellor Rachel Reeves. This will be Labour’s first budget since taking office after the election on 4 July. During a statement in the House of Commons, Ms Reeves accused the previous Conservative government of misleading the public about their planned spending, citing a £22 billion deficit uncovered by a Treasury review of government finances.
Despite Labour’s pledge to not increase major taxes during the election campaign, the Conservatives have interpreted Ms Reeves’ statement as a precursor to potential tax hikes at the next budget. Former chancellor Jeremy Hunt accused Ms Reeves of using the previous government as a scapegoat to justify raising taxes and cancelling projects.
The budget, which outlines the government’s economic plans, will include the full economic and fiscal forecasts from the Office for Budget Responsibility, according to Ms Reeves. She emphasized that it will be a budget focused on fixing the foundations of the economy, guided by the principles of the newly elected government.
Ms Reeves also promised to prioritize responsible use of taxpayers’ money, ensuring that all public spending represents value for money. She reiterated Labour’s pledge to not raise taxes on working people, including national insurance, income tax rates, or VAT. However, she did acknowledge that challenging trade-offs will still need to be made.
In addition to the budget, Ms Reeves announced the launch of a multi-year spending review, which will set departmental budgets for at least three years and include budgets for this year and next year alongside the 30 October budget. She emphasized the importance of meeting Labour’s fiscal rules, balancing the current budget, and reducing debt as a share of the economy by the end of the forecast.
