July 08, 2024 | UK-Facing News/British Chambers of Commerce

Growth is UK’s ‘national mission’, Chancellor to Say in First Speech

Reuters Chancellor Rachel Reeves walked into Number 10 Downing Street

Rachel Reeves will promise to make kickstarting economic growth a “national mission”, in her first speech as chancellor.

Speaking to business leaders at the Treasury later, Ms Reeves will set out Labour’s plan for the economy and say the era of “chaos and irresponsibility is over”.

She is also expected to announce she will bring back compulsory house building targets, as part of an overhaul of Britain’s planning rules.

And she will say that with political turmoil in the France and the US, Britain is now back as one of the most stable places for international investment.

Former Bank of England economist Ms Reeves was appointed chancellor on Friday, after Labour’s landslide election win.

She and her team worked through the weekend on this speech to business leaders and investors who have stalled investment in Britain in recent years amid the political chaos of the post-Brexit years and the Liz Truss mini-budget.

Ms Reeves is expected to announce some immediate loosening of planning red tape that has held back construction, infrastructure, and the energy grid.

It will be done in the hope that investors will unleash tens of billions of pounds of investment in green industry and housebuilding.

Mandatory housebuilding targets are also expected to return.

The Labour manifesto already promised development on so-called “grey belt” land – which are poor-quality areas in the green belt.

A moratorium on onshore wind power is expected to be lifted, and there will be extra funds for hundreds of new planning officers.

She told the BBC on Friday that she was “willing to have a fight” with those who have delayed and rejected house building and infrastructure investment in the planning system.

On Monday morning, she will tell business leaders that “where previous governments have been unwilling to take the difficult decisions – I will deliver. It is now a national mission. There is no time to waste”.

“Last week, the British people voted for change. And over the past 72 hours I have begun the work necessary to deliver on that mandate.

“Our manifesto was clear: ‘Sustained economic growth is the only route to improving the prosperity of our country and the living standards of working people.”

The chancellor is also expected to claim, based on new Treasury analysis, that the UK economy is £140bn smaller than if it had grown at the same rate as other advanced economies.

She is expected to add: “This could have brought in an additional £58bn in tax revenues last year alone to sustain our public services.

“It falls to this new government to fix the foundations.”

She will not yet announce new tax and spend measures.

She will meet this week with the Office of Budget Responsibility, and a Budget and Spending Review is expected in the Autumn. She also met with the governor of the Bank of England on Friday.

The share prices of UK housebuilders jumped on Friday after Labour’s win.

During the election campaign, Labour focused largely on tackling housing supply, with a promise to build 1.5 million homes over the next parliament.

Labour and the Liberal Democrats both pledged to bring in mandatory housing targets, while the Conservatives did not.

Proponents of compulsory house building targets say they are necessary to make sure councils build the number of houses required.

Opponents, though, say the mandatory approach has been tried unsuccessfully for decades and it risks forcing development on green fields sites against the wishes of locals.

Some have warned that reforming the planning system, as Labour have promised, will not be easy.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said it is likely to be a “gradual and tortuous process”.

Source from BBC

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