(London) Britain’s new Labour Chancellor of the Exchequer Rachel Reeves, who is due to address Parliament on Monday, is set to reveal a massive £20bn hole in the public finances, the PA and FT reported on Friday.
Such an announcement could be a prelude to tax increases in the coming months.
Mme Reeves is also expected to give the date of the government’s next budget announcement in the autumn during his speech, according to PA.
Spokespeople for the British Treasury contacted by AFP were unable to confirm this information immediately on Friday.
At the G20 in Brazil, Mr.me Reeves told reporters, including AFP, on Thursday that she would make “a statement to Parliament on Monday on the state of the public finances and the pressures on government spending.”
She describes a “huge challenge for the Labour government” because of the damage the Conservatives have done to the economy and public services.
Rachel Reeves has promised “iron discipline” on the budget, as Keir Starmer’s government will have little fiscal room to deliver the change it promised during its election campaign.
Public sector borrowing reached £14.5 billion (nearly C$26 billion) in June, down almost 20% from a year earlier but higher than expected, the Office for National Statistics (ONS) announced last week.
Public debt, which has been flirting with 100% of gross domestic product (GDP) for several months – a consequence in particular of aid distributed during the pandemic or during the energy crisis – was at 99.5% of GDP at the end of June, remaining at levels not seen since “the early 1960s”, according to the ONS.
Labour, which won the July 4 election by a landslide after 14 years of successive Conservative governments, has ruled out raising income tax or VAT, national insurance contributions and corporation tax, but changes to capital gains or inheritance tax could be considered.