Chancellor defends budget choices ahead of Spring statement
Chancellor Rachel Reeves has defended the government’s recent budget decisions, claiming they were necessary for economic stability amid uncertain global conditions.
In an interview with BBC’s Laura Kuenssberg on Sunday, Reeves emphasised the importance of making difficult choices to ensure long term fiscal responsibility.
“There are always going to be costs for every choice you make, but there are also costs for irresponsibility”, Reeves said, ahead of Wednesday’s Spring statement.
“I did the responsible thing in the Budget. It required difficult choices but now, in the changing and uncertain world we’re in, we have economic stability.”
Reeves outlined several achievements stemming from the government’s policies, which she claimed have helped restore confidence in the markets.
These include maintaining non-negotiable fiscal rules, reducing debt as a share of GDP from record levels inherited from the previous government, and the Bank of England’s recent decision to lower interest rates.
The Chancellor also highlighted that wages have risen almost twice the rate of inflation in recent months, benefiting workers across the country.
While acknowledging the need for further action, Reeves said that the government’s focus on stability and reform would bring about growth, without relying on tax hikes.
“We have more to do, but my goal is to bring back the growth without asking people to pay more”, she added.
A major component of Reeves’ plan to reduce government spending is a commitment to cutting civil service costs by 15 per cent by the end of this parliamentary term, she told the BBC.
She outlined how government had increased its administrative and back office functions during the pandemic, but argued that the size of civil service hasn’t been scaled back since.
To address this, every government department has been asked to rank their spending priorities, ensuring resources are allocated accordingly.
“We want to put more money into things that are important for citizens, and less on things that are just not necessary”.
No zero-based review of government spending has been conducted since 2007, a review which Reeves sees as crucial to ensure effective spending.
She reiterated: “I’m determined to bring back the growth that is the prize on offer, alongside the stability and reform needed to deliver it”.