Chancellor Rachel Reeves has secured spending settlements with all government departments ahead of her upcoming Budget on 30 October. Recent reports had suggested some disagreement between the Treasury and multiple departments over the proposed scale of spending cuts. Reeves said she had struck deals with all her cabinet colleagues, traditionally marked by bursting balloons in the Treasury representing each department’s funding agreement. In a BBC Radio 5 interview, Reeves insisted departments would have to find savings in order to balance the budget, acknowledging that her colleagues had inherited a difficult situation.
In the run-up to the Budget, there have been reports of Cabinet unease over the required spending cuts to reach the Treasury’s target of savings of £40bn. The Treasury has missed its initial 16 October deadline for finalising all major Budget measures for submission to spending watchdog the Office of Budget Responsibility. This has led Deputy Prime Minister Angela Rayner, as well as Justice Secretary Shabana Mahmood and Transport Secretary Louise Haigh, to lodge complaints about the scale of cuts expected in their departments. Though Haigh denied her involvement in such letter-writing, Reeves suggested such communication was reasonable, while insisting that any additional money would ultimately come from raising taxes or diverting funds from other departments.
Labour has previously pledged not to return to austerity measures or raise rates of national insurance or VAT. Reeves acknowledged that additional money would be required to address the needs of working people, and suggested that other taxes might be tweaked in order to meet the sums required. As Reeves sets out to balance the first Labour Budget in 14 years, she has called upon a series of political figures for guidance and input. These figures include former Labour chancellors Gordon Brown and Alistair Darling, despite the latter having died last year. Reeves maintains a good working relationship with Conservative shadow chancellor Jeremy Hunt, despite criticism of his party’s management of public funds.
Reeves has also spoken of her pride in becoming the first female chancellor in the role’s history, and has sought inspiration from other female finance ministers from around the world, including US Treasury Secretary Janet Yellen and Canadian finance minister Chrystia Freeland. She suggested that in her position, she has the opportunity to meet with other female leaders in finance who might similarly be making strides and creating positive change
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