Speaker 1: I'm here with the Chancellor of the Exchequer of the
Speaker 1: United Kingdom, Rachel Reeves at Tenser Reeves. Thank you so
Speaker 1: much for being with us. You're heading into a pretty
Speaker 1: tough budget season. There is the expectation that taxes are
Speaker 1: going to have to go up and that spending is
Speaker 1: going to have to cut. How much head room are
Speaker 1: you're looking to build for yourself so you don't have
Speaker 1: to do this again in terms of raising taxes again
Speaker 1: and going through another round of cuts.
Speaker 2: I think the British people recognize that the last year
Speaker 2: has been a challenging one, whether it is conflict in
Speaker 2: the Middle East, Russia's continued aggression in Ukraine, the need
Speaker 2: for hire defense spending, and also increasing trade barriers around
Speaker 2: the world have put trees under a lot of pressure
Speaker 2: and no country, including the UK, is immune from that.
Speaker 2: But I've also been really clear that we will continue
Speaker 2: to meet the fiscal rules that I set out in
Speaker 2: my budget at last year, and we will get debt
Speaker 2: down as a share of our economy, We will bring
Speaker 2: down the deficit and we will balance day to day
Speaker 2: spending with tax receipts. And when we get the full
Speaker 2: forecasts from the Independent Office for Budget Responsibility. We will
Speaker 2: make sure that we are continuing to achieve those things.
Speaker 2: In terms specifically of the headroom. The headroom has been
Speaker 2: lower in the past. It was as low as six
Speaker 2: and a half billion pounds in the last parliamentary session.
Speaker 2: Obviously a more headroom would would be good, but there's
Speaker 2: always trade offs because of course to build more headroom
Speaker 2: you would have to increase taxes further, you're cut spending further.
Speaker 2: But we'll continue to manage that balancing act. But I
Speaker 2: recognize that in a world as volatile as it is today,
Speaker 2: having a bit more of a buffer can help absorb shocks.
Speaker 1: You've talked about raising the taxes and in a previous
Speaker 1: interview you were talking about particularly targeting wealthy residents of
Speaker 1: the United Kingdom. Is that really the focus right now?
Speaker 1: Is it broader based in terms of the tax rays
Speaker 1: you have in mind?
Speaker 2: In the budget last year I did increase taxes on
Speaker 2: some of the wealthiest and we also increase taxes on business.
Speaker 2: I'm very mindful again to get the balance right. We
Speaker 2: want to attract talent to the UK and keep talent
Speaker 2: in the UK. I also want to make it easier
Speaker 2: for businesses to grow and stay in Britain. So I'll
Speaker 2: set out the individual taxes on November twenty sixth, but
Speaker 2: I want this to be a pro growth budget that
Speaker 2: maintains Britain as a great place to start and grow
Speaker 2: a business and to bring in investment. And obviously over
Speaker 2: the last few months we've secured huge amounts of foreign
Speaker 2: direct investment, including from the United States, with those big
Speaker 2: technology companies investing in Britain.
Speaker 1: There's been a concern that if taxes go up too
Speaker 1: much on businesses, people start to leave and individuals will leave,
Speaker 1: and that there's been some anecdotal evidence of that. Just
Speaker 1: personally when I meet people from London in New York,
Speaker 1: I'm just wondering, have you kind of growt aware of that,
Speaker 1: tried to reduce how much you lean on that lever.
Speaker 2: Well, we need some further changes to the tax arrangements
Speaker 2: for non domicile people earlier this year, which I think
Speaker 2: have been welcomed. We'll continue to monitor the response to
Speaker 2: any tax but I would also say there are many
Speaker 2: people choosing to make Britain their home. We've just doubled
Speaker 2: the number of visas available for high net worth individuals
Speaker 2: for entrepreneurs and for academics in some of the growth
Speaker 2: sectors to build teams in the UK, and we no
Speaker 2: doubt that people will apply for those visas and we
Speaker 2: will fill those places. So the UK remains an attractive
Speaker 2: place in part because we are securing investment from the world.
Speaker 2: We're reforming our capital markets to make it easier for
Speaker 2: businesses to raise finance in London, and we're reforming our
Speaker 2: regulator and planning systems to make it easier to get
Speaker 2: things done in the UK.
Speaker 1: How much you plan to cut some of the welfare
Speaker 1: spending in particular and not just sort of day to
Speaker 1: day spending of the government.
Speaker 2: Well, it is important to make sure that all budgets
Speaker 2: included in the welfare budget are well managed, and we
Speaker 2: do need to see reform of our welfare system when
Speaker 2: we will continue to make the case with that reform.
Speaker 2: We've already brought in some changes to something called the
Speaker 2: universal Credit system to reduce the incentives to get the
Speaker 2: health related element of that, and they're just a couple
Speaker 2: of weeks ago. I announced a youth guarantee to help
Speaker 2: young people not in education, employment and training get back
Speaker 2: into work. Like many countries around the world, particularly since
Speaker 2: the pandemic, we have experienced challenges in terms of youth
Speaker 2: unemployment and youth in activity, and we're determined to turn
Speaker 2: that around with particular programs targeted at those young people.
Speaker 1: One big question for a lot of people is the
Speaker 1: Office for a Budget Responsibility and what they'll come out
Speaker 1: with in terms of grading the growth forecast for the
Speaker 1: United Kingdom. Do you have any expectation or understanding of
Speaker 1: what that growth downgrade looks like.
Speaker 2: Well, the Office of Budget Responsibility, like other forecasters, use
Speaker 2: the past productivity performance to forecast the future, and it
Speaker 2: is true that under the previous government over the last
Speaker 2: fourteen years, both growth and productivity were underwhelming, and the
Speaker 2: Office Budget Responsibility will update their predictions for the future
Speaker 2: based on the past, and it's my job as Chancellored
Speaker 2: to try and beat those expectations. And that's why we're
Speaker 2: pursuing policies on trade, investment, on planning, on permitting, on
Speaker 2: regulation and capital market reform, as well as through the
Speaker 2: trade deals that we're securing to make sure that our
Speaker 2: economy is well suited to benefit from global investment, from
Speaker 2: business and wealth creation. And that's what we'll continue to do.
Speaker 1: Tanes the Reeves, thank you so much for taking the time.
Speaker 2: Thank you.
Speaker 1: That was arichel Reeves, the Chancellor of the Exchequer in
Speaker 1: the United Kingdom.