LONDON (AP) – Great Britain new head of the Treasury said on Sunday he would manage the economy with “iron discipline” but suggested he would give public sector workers an above-inflation pay rise to help end a wave of strikes and conflicts.
O Labor Party Government is under pressure from supporters and unions to spend more on wages and social benefits, two weeks after being elected with promises not to raise personal taxes or increase public debt,
“I think people know things are a mess,” Treasury chief said Raquel Reeves he told the BBC, arguing that the previous Conservative government had left “public services on their knees, a tax burden at the highest in 70 years, a debt almost the same size as our entire economy.
“I’m going to talk to people about the scale of the challenge and then start fixing the foundations,” she said. “I will direct our economy with iron discipline, bringing back stability.”
The center-left Labor Party won landslide electoral victory on July 4, with a promise to grow the UK’s sluggish economy, unleash a wave of residential construction and green energy projects and fix the country’s fortunes. worn-out public services.
He faces a wary and weary electorate eager for relief from a cost of living squeeze which saw interest rates hit 11% at the end of 2022 following Russia’s invasion of Ukraine and the tax cut plans of briefly serving Conservative Prime Minister Liz Truss.
Inflation fell to 2% and Prime Minister Keir Starmer The government wants to resolve strikes by thousands of hospital doctors that have put further pressure on the fragile state-funded National Health Service. Nurses, teachers, railway staff and other public sector workers have also staged strikes over the past year to demand higher wages.
The Times of London reported that independent bodies that advise on public sector pay have recommended a 5.5% pay rise for teachers and around 1.3 million NHS staff. Paul Johnson, director of the tax think tank, said it could cost the government 3 billion pounds ($3.9 billion) more than budgeted.
Reeves, the country’s first female Chancellor of the Exchequer, said the government was looking at the recommendations and would find a way to give workers a pay rise and “make the sums go up”.
“There is a cost to not establishing, a cost to new industrial action, a cost in terms of the challenge we face in recruiting, retaining doctors, nurses and teachers,” she said.
The government is also under pressure from anti-poverty groups and many Labor lawmakers to abandon a policy introduced by the Conservatives that limits a widely paid social benefit and tax credit to the first two children in a family. The new government says it cannot afford to abolish the two-child limit.
Conservative lawmaker Jeremy Hunt, Reeves’s predecessor as head of the Treasury, said it was “absolutely absurd” to claim his party had left the economy in the worst state in decades after his 14 years in office.
“She wants to set the stage for tax increases,” he said of Reeves. “She should have been honest about this before the election.”
