BUST TO BOOM
Chancellor Rachel Reeves promises a planning revolution – but paves the way for tax hikes
She also declared she's been handed the worst economic inheritance since World War Two
NEW Chancellor Rachel Reeves has promised a planning revolution to get Britain booming, but paved the way for tax rises.
She said yesterday she was prepared for “short-term pain” while she forces through controversial reforms.
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They include taking decisions on the likes of big energy projects at a national level — bypassing local communities — and ending a ban on land-based wind farms.
She will also rip up the planning rules to get more people on the housing ladder, as part of a move to turbo-charge growth.
Ms Reeves, the first female boss of the Treasury, said: “I know there will be opposition to this. I’m not naive to that.”
She also declared she has been handed the worst economic inheritance since World War Two.
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The Chancellor has asked civil servants to compile a dossier on the current state of play over the coming weeks.
The move is likely to spark fears the new Labour government is laying the groundwork for billions of tax hikes not included in its party manifesto.
Ms Reeves’s planning reforms will include restoring mandatory local house building targets in a bid to build 1.5million new homes over the next five years.
She will also take an axe to the “absurd” ban on new onshore wind farms in England, with energy projects critical to the nation given priority in the planning system.
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Three hundred extra planning officers will be appointed and plans for a national wealth fund will be announced shortly.
Ms Reeves said concerns led by the green lobby cannot stand in the way of developments — some on green belt land.
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She said: “We must acknowledge that trade-offs always exist.
Any development may have environmental consequences, place pressure on services and rouse voices of local opposition, but we will not succumb to a status quo which responds to the existence of trade-offs by always saying ‘No’.
Rachel Reeves
“Any development may have environmental consequences, place pressure on services and rouse voices of local opposition, but we will not succumb to a status quo which responds to the existence of trade-offs by always saying ‘No’.”
Ms Reeves will deliver her first Budget in the autumn. But as an immediate step, she has asked civil servants to produce an assessment of the financial “mess” left by the Tories, which she will present to MPs before the summer recess.
The Chancellor added: “What I have seen in the past 72 hours has only confirmed that our economy has been held back by decisions deferred and decisions ducked, political self-interest put ahead of the national interest.
“A government that put party first and country second.”
She also said governments had been unwilling to make the “difficult decisions to deliver growth”, but stressed: “I will not hesitate.”
Tax hike warning
Economists warned the new government will likely have little choice but to introduce tax rises to fund public services.
Throughout the campaign, Labour ruled out increases to income tax, national insurance and VAT, but was less than clear on ways it might fund public spending.
Treasury analysis showed 14 years of “chaos and uncertainty”, claiming if the UK had grown at the average rate of an OECD group of developed nations, the economy would be £140billion bigger and there would be an extra £58billion in tax revenues for public services.
But a leaked report by the left-leaning Guardian last month said the party was looking at raising wealth taxes in what would be a raid worth an estimated £10billion.
A Conservative Party spokesman last night said: “We warned Labour would attempt this ruse as a cause to raid pensions and raise taxes. It is now clear that is coming to pass, and the British people will pay the price.”
Ms Reeves also refused to rule out resurrecting the northern leg of the HS2 rail link with the help of private money.
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Chief Secretary to the Treasury Darren Jones hinted at a rethink, noting Labour would have a “conversation” with Greater Manchester mayor Andy Burnham.
Visiting the Oval Village homes project in South London with Deputy PM Angela Rayner yesterday, Ms Reeves said becoming the first female Chancellor feels like “smashing one of the last glass ceilings in politics”.
Rachel Reeves - the new 'Iron Chancellor'
ONCE cruelly dubbed “boring snoring” by a TV exec, Rachel Reeves has spent the past 18 months carefully reinventing herself as the new, non-nonsense ‘Iron Chancellor’ in waiting.
It is a deliberate nod to Margaret Thatcher and designed to show Brits that she can be trusted with their hard-earned cash and is a tough woman not to be messed with.
In some ways Rachel’s rise seems written in the stars. She was a schoolgirl chess champion, studied PPE at Oxford and worked at the Bank of England.
Then came politics. And after getting elected as Leeds West MP in 2010, Rachel quickly became a rising star of Ed Miliband’s frontbench - although she refused to serve in Jeremy Corbyn’s shadow cabinet.
Her career really took off when Sir Keir Starmer promoted her to shadow chancellor in his first big reshuffle in 2021.
Since then the pair have been joined at the hip - they are probably the closest No10 and No11 pairing since David Cameron and George Osborne.
A tough cookie, she was key in scrapping Labour’s £28 billion a year green eco pledge - much to the fury of Ed Miliband and Angela Rayner.
She's now become Britain’s first ever female Chancellor. Quite the achievement. As Rachel’s favourite singer Beyonce once sang: Who run the world? Girls!