New Chancellor announces plans to improve economy

In her first speech as Chancellor, Rachel Reeves has laid out plans to improve the UK's economy.

She said there is "no time to waste" to fix the foundations of the economy.

In her speech delivered on Monday (8 July), Reeves said she wanted to outline the first steps taken to "fix the foundations" of the UK's economy.

She said: "I have repeatedly warned that whoever won the general election would inherit the worst set of circumstances since the Second World War.

"What I have seen in the past 72 hours has only confirmed that."

She went on to say, however, that: "After fourteen years, Britain has a stable government. A government that respects business, wants to partner with business, and is open for business."

Over the weekend, Reeves instructed Treasury officials to provide an assessment of the state of the UK's spending inheritance to "understand the scale of the challenge." 

This will be separate from a Budget that will be held later this year where Reeves will confirm the date of that Budget, alongside a forecast from the Office for Budget Responsibility, in due course.

She said: "New Treasury analysis that I requested over the weekend shows that, had the UK economy grown at the average rate of other OECD economies this last 13 years, our economy would have been over £140 billion larger.

"This could have brought in an additional £58 billion in tax revenues in the last year alone. That’s money that could have revitalised our schools, our hospitals, and other public services."

Additionally, she said: "We will ask the Secretaries of State for Transport and Energy Security and Net Zero to prioritise decisions on infrastructure projects that have been sitting unresolved for far too long."

Reeves also said she would set out new policy intentions for critical infrastructure in the coming months, ahead of updating relevant National Policy Statements within the year.

In response to the Chancellor’s plans for housing and planning reform, London boroughs said they have welcomed the renewed focus on housebuilding.

The announcements included investment in council planning officers, a new taskforce to accelerate stalled housing sites, and the restoration of mandatory housing targets.

Boroughs have long sought to turbocharge housebuilding in the capital to encourage economic growth and address London’s worsening homelessness emergency.

Cllr Claire Holland, deputy chair of London Councils, said: “Boroughs are strongly pro-housing growth and welcome the Chancellor prioritising this pivotal issue. We’re standing with hardhats on, shovels in hand, and ready to work with the government on our shared housebuilding ambitions.

“There is a desperate need to build more homes in the capital. Without new housing – particularly affordable housing and homes for social rent – London’s homelessness crisis will only continue to worsen. The capital’s future success depends upon us tackling this.

“Boroughs have a key role to play. We have a good record in supporting housebuilding and in granting planning permission, but we’re keen to go even further in ensuring more homes get built, more quickly. As well as reforming the planning system to maximise delivery, we also need to look at the wider challenges undermining housebuilding – such as lack of crucial local infrastructure, construction skills shortages, and insufficient long-term funding for developing affordable homes.”