UK Finance Minister Reeves vows no austerity despite tough budget

Finance minister Rachel Reeves will promise Britain on Monday there will be no return to “austerity” or widespread spending cuts despite previous warnings of a tough budget aimed at fixing the foundations of the economy.

Following Labour’s election victory in July, Reeves suggested taxes were likely to rise in her first budget on Oct. 30 because of what she said was a 22 billion-pound ($29 billion) hole in the public finances.

She also announced that millions of pensioners would no longer receive fuel payments in the winter, a decision the government says it didn’t want to take but one which trade unions and other traditional Labour supporters have criticized.

At the Labour Party conference in the northern English city of Liverpool, Reeves will use Monday’s keynote speech to reiterate that she will make the necessary decisions to give the stability she said was “the essential precondition for business to invest with confidence and families to plan for the future”.

“There will be no return to austerity. Conservative austerity was a destructive choice for our public services – and for investment and growth too,” Reeves will say, according to extracts from her speech.

“We must deal with the Tory (Conservative) legacy and that means tough decisions. But we won’t let that dim our ambition for Britain.”

Amid criticism that Reeves and Prime Minister Keir Starmer have taken an overly gloomy view which, along with a furor over donations, has cast a pall over what would otherwise have been a Labour celebration of their first election win for 14 years, she will hint at a brighter future beyond the tough circumstances she inherited.

“I can see the prize on offer, if we make the right choices now. And stability is the crucial foundation on which all our ambitions will be built,” she will say.

Reeves will also reiterate that Labour’s manifesto commitments not to raise income tax, National Insurance social security payments, value-added tax and corporation tax.