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UK finance chief says public finances show $28 billion spending hole, cuts to road and rail projects – NBC Los Angeles
- In a highly anticipated statement to the House of Commons, Britain’s finance minister Rachel Reeves vowed to make the “necessary”, “urgent” and “incredibly difficult” choices to restore the country’s economic stability.
- “If we can’t afford it, we can’t do it,” Reeves said.
- Reeves warned that “tough decisions” still lie ahead on spending, welfare and taxes.
Britain’s finance minister Rachel Reeves on Monday announced a series of project cuts after detailing how the newly elected Labour government inherited a projected £22 billion ($28.2 billion) overspend from the Conservatives.
In a much-anticipated statement to the House of Commons, Reeves vowed to make the “necessary”, “urgent” and “incredibly difficult” choices to restore the country’s economic stability.
In addition to cuts to winter fuel payments, the finance minister said the centre-left government would cancel the Restoring Your Railways Fund, scrap plans to build a tunnel at Stonehenge and review a hospital expansion programme announced by former Prime Minister Boris Johnson.
“If we can’t afford it, we can’t do it,” Reeves said, adding that investment cuts would not be enough to cover the deficit. She warned that “tough decisions” still lay ahead on spending, welfare and taxes.
Reeves said he plans to deliver his first annual budget on Oct. 30, in what will be the new administration’s first major fiscal event.
Britain’s finance chief has previously ruled out increases in income tax, national insurance, VAT or corporation tax — the government’s main sources of revenue. However, Reeves must orchestrate a delicate balancing act given his party’s pledges to also boost domestic investment and public sector pay.
Reeves has been in office since the centre-left Labour Party guaranteed a large parliamentary majority in the country’s general elections earlier this month. His comments were visa would likely set the tone for the rest of his term as Chancellor of the Exchequer.
Speaking to CNBC on Friday, Reeves he said a Labour government would be “the most pro-growth, pro-business government” the country has ever seen.
— CNBC’s Karen Gilchrist contributed to this report.