Key events
Reeves says she will soon announce the Covid corruption commissioner.
This is the person tasked with recovering money paid for dodgy Covid contracts. There had been talk that the appointment might be announced today.
And she says David Goldstone is being appointed as chair of the new Office for Value for Money she is setting up.
And Reeves reads out the growth figures.
They show a faster than expected rise this year and next year, but then weaker than previously forecast growth later in the forecast:
-
GDP in 2024: +1.1%, up from 0.8% growth forecast at the March budget
-
GDP in 2025: +2%, up from 1.9% growth forecast at the March budget
-
GDP in 2026: +1.8%, down from 2.0% growth forecast at the March budget
-
GDP in 2027: +1.5%, down from 1.8% growth forecast at the March budget
-
GDP in 2028: +1.5% down from 1.7% growth forecast at the March budget
-
GDP in 2029: +1.6%, a new forecast
Reeves reads out the forecasts for borrowing figures.
It is due to fall from 4.5% of GDP this year to 2.1% of GDP by the end of the forecast, she says.
Reeves says growth is her mission.
She says she is confirming her economic rules.
The “stability rule” means the government will not borrow to fund current spending.
She says the government will meet this in 2029-30, until that is the third year in the forecast, and then that will be the target for three years ahead, she says.
She says the government is forecast to meet this two years early.
This is from Paul Johnson, director of the IFS.
Current budget balance target by 2029-30 and then target 3 years ahead. Sensible. Current forecast is surplus by 27-28. But only by a small margin (
Reeves says inflation is now forecast to be 2.5% this year, and 2.6% next year.
CPI inflation is then forecast to drop to 2.3% in 2026, 2.1% in 2027 and 2028, before finally hitting the Bank of England’s 2% target in 2029.
That’s higher than forecast in the March budget – when the OBR predicted inflation would be just 1.5% in 2025.
Reeves says she is maintaining the Bank of England’s inflation target of 2%.
She thanks Bank of England staff for their help.
And she thanks her predecessors for their advice. Kwasi Kwarteng said in a Mail on Sunday article his mini-budget was not perfect. She agrees, she says.
Reeeve says budget will raise taxes by £40bn
Reeves says this budget will raise taxes by £40bn.
Reeves says she is setting aside £11.8bn to compensate infected blood victim scandals, and £1.8bn for Post Office scandal victims
Reeves says people can see the problems facing public services. She says:
The country has inherited not just broken public finances, but broken public services too.
The British people can see and they can feel that in their everyday lives: NHS waiting lists at record levels, children in portacabins as school roofs crumble, trains that do not arrive, rivers filled with polluted waste, prisons overflowing, crimes which are not investigated and criminals who are not punished.
She says the last government did not provide funds for services, and for things like compensation scheme (for Post Office operators, and for victims of the blood scandal).
She says Rishi Sunak apologised to the victims of the blood scandal. But he did not budget for compensation, she says.
She says she is setting aside £11.8bn to compensate the blood scandal victims, and £1.8bn for the victims of the Post Office scandal.
Reeves says OBR report out today says Tories did not disclose full information about spending pressure at time of last budget
Reeves says the Tories failed the country.
Austerity broke the public services, their Brexit deal harmed the economy, and their policies led to a fall in living standards.
Reeves says today the government is publishing an analysis of the £22bn black hole in this year’s spending she says Labour inherited. It includes hundreds of unfunded measures, she says.
And she says the OBR is publishing its own report (as reported on Sunday) saying the last government did not disclose all the spending pressure it faced at the last budget. If the OBR had known about these, its assessments would have been “materially different”, she says.
She says she will implement all the recommendations from the OBR’s review.
Here’s our colleague Jessica Elgot’s take:
Bombshell –
Reeves says she will publish a “line by line” analysis of her £22bn black hole claim and says the OBR will publish their own review – “the previous government did not provide the OBR with the information” and the Spring forecast would have been “materially different”— Jessica Elgot (@jessicaelgot) October 30, 2024
Reeves says she is “deeply proud” to be the first female chancellor.
She say her messages to girls everywhere is, let there be no ceiling to your hopes.
