Rachel Reeves will head to Saudi Arabia on Monday as she looks to strengthen the UK’s economic relationship with the country, briefly leaving behind the growing speculation at home on the upcoming Autumn Budget.
The chancellor will use the visit to Riyadh to try to make progress on a trade deal with the Gulf Co-operation Council (GCC), meeting senior Saudi royals, US administration figures and global business chiefs.
The Treasury hope an agreement struck with the GCC, which also includes United Arab Emirates, Qatar, Oman, Kuwait and Bahrain, could add £1.6 billion to the UK economy and contribute an additional £600 million to UK workers’ annual wages in the long term.
It comes less than a month before Ms Reeves will announce her potentially difficult Budget, with the chancellor thought to be under pressure to break a pre-election Labour pledged not to increase income tax or National Insurance.
On the eve of her trip to Saudi Arabia, Ms Reeves said: “I am taking Britain’s offer of stability, regulatory agility and world-class expertise directly to one of the world’s most important trade and investment hubs, making that case in our national interest.
“After our landmark deals with the US, EU and India, we’re determined to build on that momentum by going further and faster on partnerships that create good jobs, boost business and bring investment into communities across the UK – from the North East to the Oxford-Cambridge corridor.”
The hope of a trade deal and investment from abroad is not likely to stop the ongoing speculation on the Budget in the UK this week, with experts and commentators debating how Ms Reeves will fill a shortfall, estimated to be between £30bn and £40bn.
Ministerial sources have told The Independent that changes to the top rate of income tax have been discussed within government.
The Mail on Sunday reported Ms Reeves is considering a new mansion tax which would hit owners of properties with an annual charge of 1 per cent of the amount by which its value exceeds £2 million, meaning a £10,000-a-year levy for homes worth £3 million.
The Sun on Sunday suggested she was considering a manifesto-busting 2p hike to income tax.
Health Secretary Wes Streeting admitted there were issues with the economy and said households were also feeling the squeeze.
However, he would not be drawn on “wild speculation about the Budget” ahead of Ms Reeves’ statement next month.
He told GB News: “We’re going to wait for the chancellor to set out her Budget. People can see the public finances are in a challenging state.
“So is the economy, but also so are family finances, so are business finances, we recognise that, we’ve got to get our economy growing again.”
In Saudi Arabia, Ms Reeves is expected to set out an ambition to work constructively towards this on both sides in her conversations with Gulf counterparts, while acknowledging “areas of divergence and cultural differences”, according to officials.
She will speak at the Fortune Global Forum on Monday and FII – nicknamed Davos in the Desert – on Tuesday to persuade business leaders that the UK is a stable investment destination.
