UK Chancellor Reeves to Detail a ‘Broke and Broken’ Britain

(Bloomberg) -- Chancellor of the Exchequer Rachel Reeves will paint a dire picture of the UK’s public finances in a speech on Monday that will find her wedged between opposition parties and critics from within her own. 

Reeves will detail to the House of Commons a country that is “broke and broken,” with crises or chaos in housing, health, water, education, defense, transport and migration, according to a government statement. She will blame the previous Conservative government and “populist politics.”

The speech comes less than a month after the newly elected Labour government took power, and Reeves will be under pressure not only to set the right tone for the next five years, but to keep opponents at bay.

The new finance chief will detail everything from challenges for farming and homebuilding to waiting times for medical procedures and children persistently not attending school. But at issue is how Labour will fix the crises Reeves is poised to say she inherited. 

During their campaign, Reeves and Prime Minister Keir Starmer repeatedly promised they had no plans to raise taxes beyond a select few. Already their opponents are saying they will backtrack. 

While Labour commands a huge majority in parliament, Reeves and Starmer are under pressure from left-wing members of the party to spend more on public services, funded by increased taxes on the wealthy. On Tuesday, Starmer clashed with seven members of Parliament who voted for an amendment calling for more generous welfare payments for parents. Starmer responded by kicking them out of the party for six months. 

Reeves will also commission a forecast by the Office for Budget Responsibility and confirm timings of the next budget and a multi-year spending review.

“Labour is right to point out how dire its inheritance on public services is,” the Institute for Government think tank said in a report published on July 22. “The hard truth for Labour is that sticking to the status quo means most services are likely to be performing worse at the next election in 2028/29 than at the last election in 2019.”

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