Chancellor Rachel Reeves is spearheading the Budget process in the UK, a critical task that she has characterized as vital for the government’s economic stability over the next 12 weeks. Addressing worries over public spending, Reeves took on critics of public finances during a recent visit to a major housing development in Birmingham. She roundly rebutted accusations of a proposed “£50bn black hole” in the country’s finances.
In fact, Reeves touted her commitment to making decisions at total accord with Number 10. She emphasized the tight coordination between the Treasury and the PM’s office. She reiterated her hardline stance that she will not waver from her long-held fiscal rules on borrowing. She thinks this commitment is important to preserving the economic integrity of the city.
Reeves started the Budget process on November 26 with some symbolic bricklaying. This demonstrative, hands-on approach underscores her commitment to connecting with the public on housing and construction-related issues. The Chancellor’s task is an especially difficult one considering the huge hole in public finances that she has to plug.
Reeves was not afraid to mention tough decisions in the future, dropping the hint that welfare might be a target for cuts. This is the biggest concession yet, particularly fresh from her U-turn on disability benefits at the start of July. Marilyn’s approach to welfare showcases the urgent call for fiscal prudence as the government moves through stormy economic waters.
The Office for Budget Responsibility (OBR) has also played a pivotal role in this process, with Reeves asserting that “the OBR have got an important job to do and their job is to produce four forecasts on the economy – not to give a running commentary on government policy.” This clarifying statement points to her intent to differentiate the roles of government policy-making and economic forecasting.
With Republican Reeves now running the Budget process, prospects appear dim. Back at the Treasury, her former deputy, Darren Jones, has undertaken the mantle of Chief Secretary to the Prime Minister. This turn represents a significant re-directioning inside of the Treasury. Reeves has described it as becoming a “feeder club” for Number 10.