Home Business News Chancellor warns of ‘difficult choices’ amid the ‘mess left by our predecessors’

Chancellor warns of ‘difficult choices’ amid the ‘mess left by our predecessors’

8th Jul 24 1:08 pm

The Chancellor has issued a warning on Monday that the government will have to make “difficult choices.”

Rachel Reeves has warned public sector workers over the state of the UK’s finances as the Conservative has left a “mess” which Labour has inherited.

Within weeks public sector pay review bodies will report to Cabinet ministers, PA news media has reported.

If the government raises pay awards inline with inflation this will place pressure on public finance, unions could react negatively if the government does not raise pay to lift the burden of the cost of living crisis.

On Monday the UK’s first woman Chancellor told a press conference at the Treasury she has asked officials to provide an update on the state of the finances.

She said, “We face the legacy of 14 years of chaos and economic irresponsibility.

“That is why over the weekend I instructed Treasury officials to provide an assessment of our spending inheritance so that I can understand the full scale of the challenge and I will present this to Parliament before the summer recess.”

The Chancellor continued, “I’m under no illusions about the scale of the inheritance. I’ve been clear about that in my speech today.

“I’ve been clear about that these last few weeks.”

Reeves added this means there will be “difficult decisions for this incoming Labour Government because of the mess left by our predecessors.”

The Treasury analysis Reeves has seen this weekend shows had the economy grown at the rate of OECD members over the past 14-years whilst the Tories was in power, then the UK economy would be £140 billion bigger today, this also includes an additional £58 billion more for public services.

The Chancellor said, “That is why growth is so crucial, not just for driving up living standards but also for having the money for public services.”

The Chancellor then warned the government will have to make “tough” choices to fix the economy.

She added, “The question is not whether we want growth, but how strong is our resolve?

“How prepared are we to make the hard choices and face down the vested interests?

“How willing, even, to risk short-term political pain to fix Britain’s foundations?”

Reeves said Labour will “do things properly when it comes to our budget” and she has asked the Office for Budget Responsibility (OBR) to provide her with a forecast.

The Chancellor added that we “will set out the date for that budget before summer recess.”

The budget will be the “first steps” to help with growth and the Chancellor insisted she “means business.”

Reeves said, I know we can’t turn things around overnight, we face a dire inheritance, but this is our down payment.

“These are the first steps that we will take to bring that growth back to the economy and I’m determined to work, as are all of my colleagues, to do that, to unlock the private sector investment we need to grow our economy.”

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