Chancellor Rachel Reeves delivers a speech at the Treasury on July 8, 2024 in London, England.
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“This will be the most pro-growth, pro-business Treasury Department this country has ever seen,” Reeves told CNBC’s Steve Sedgwick in a remote interview.
“I will work with business to make sure that we do everything we can to create wealth, to bring business investment into the British economy,” he added.
Reeves, who has been in office for three weeks following Labour’s landslide victory in Britain’s July 4 general election, spoke from Rio de Janeiro, Brazil, where he is attending a meeting of G20 finance ministers.
The chancellor said he had met business leaders interested in doing business in the UK, but acknowledged that businesses needed more clarity on taxation.
On Monday, Reeves will outline the results of a Treasury audit, which he hopes will reveal a £20 billion ($25.7 billion) black hole in public finances.
The announcement could pave the way for a tax-hike Autumn Budget, the first major fiscal event of the new government. The financial plan date is also due to be announced on Monday.
Reeves declined to comment on the exact details, saying “issues around tax should be part of the budget.” But he added that he wanted to ensure Britain had a “competitive tax system.”
“I want taxes to be as low as possible, but unlike the previous government, I will not make promises I cannot keep, and without being able to say where the money will come from. The number one mission of this new government is to grow the economy, and to grow the economy we need to attract wealth creators to the UK,” he said.
“We can’t raise taxes and spend our way to higher growth and greater prosperity. We need to attract business investment to be able to do that.”
Reeves has previously ruled out raising income tax, national insurance, VAT or corporation tax – the government’s main sources of revenue. But the chancellor has a fine balance to strike given his party’s pledge to also boost national investment and public sector wages.
Prime Minister Keir Starmer indicated Wednesday that there would be tough fiscal decisions ahead, telling parliament that his government was facing a “deeper crisis than we thought” during the last 14 years of Conservative rule.
The center-left leader has vowed to take a tough stance on public spending until the country’s finances return to normal. On Tuesday, he suspended seven party members who voted against him over a proposal to scrap a cap on spending on two-child allowances.
Labour’s pledge to return the country to economic growth was reiterated as a “fundamental mission” in last week’s King’s Speech, as the country looks to emerge from a cost of living crisis.
Among the economic measures previously announced by the government are the nationalisation of the railway operator and the creation of a publicly owned clean energy company, as well as further investment in public services and the creation of new homes.
The G20 meeting marks a first step for the new finance minister, who has touted the opportunity to “reset” some of Britain’s relationships with its international partners.
The comments echo similar remarks made by Starmer at a European Political Community summit last week, as he sought to distance his government from Britain’s former leadership.
Watch CNBC’s full interview with Rachel Reeves on Monday, July 29.
