Reeves urged to make simple fiscal rule change to unlock £57 billion at Budget
Your support helps us to tell the storyFind out moreCloseOur mission is to deliver unbiased, fact-based reporting that holds power to account and exposes the truth.Whether $5 or $50, every contribution counts.Support us to deliver journalism without an agenda.Louise ThomasEditorChancellor Rachel Reeves is reportedly considering making a major change to the UK’s fiscal rules at the Budget on 30 October – and experts say the shift could unlock an extra £57 billion for infrastructure spending.Ahead of the general election, Labour pledged to follow two rules. The first was that in the current budget costs are met by revenues such as tax. This has proven much more of a challenge for Ms Reeves than anticipated after she unveiled Treasury analysis in late July which showed a £22 billion shortfall in public spending.The chancellor has acknowledged this herself, saying at a Labour party conference fringe event that the measure would be “incredibly hard” to meet and require “tough decisions” to be made.The second rule is that debt must be falling as a share of the economy by the fifth year of the economic forecast. This measure rules out excessive borrowing to fill Labour’s black hole, as debt would be driven up as a result.However, during her speech at conference, Ms Reeves said: “It is time that the Treasury moved on from just counting the costs of investments to recognising the benefits too”. The comment caused experts to speculate that she may be looking to alter Labour’s fiscal rules at the Budget to deal with what Labour calls its unexpected ‘inheritance’.Rachel Reeves and Keir Starmer at Labour’s 2024 Conference (Stefan Rousseau/PA) More