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Reeves pledges to 'fix the mess' in public finances

She told reporters at a G20 finance leaders meeting in Brazil that the new Labour government still has no plans to raise taxes

Reeves pledges to 'fix the mess' in public finances

CHANCELLOR Rachel Reeves vowed to "fix the mess" in the country's finances left by the prior Tory government but said she would make no commitments on taxation until she is certain that fiscal rules can be met.

Reeves told reporters at a G20 finance leaders meeting in Brazil that the new Labour government still has no plans to raise income, national insurance or value added taxes, adding that the tax burden on working people is already too high.


"I want to be crystal clear. We have inherited a mess. But I am going to fix the mess that the Tories have left us," Reeves said.

Reeves, who will deliver a statement on Monday (29) to parliament on Britain's public finances and spending pressures, said she will not make any unfunded spending commitments, as the fiscal rules were "non-negotiable."

"I want taxes to be lower, not higher, but I'm not going to make any commitments without being able to say where the money's going to come from," Reeves told reporters on the sidelines of the meeting of finance ministers and central bank governors.

Reeves also said she could make no commitments yet on changes to wealth taxes, property taxes and inheritance taxes, leaving few clues about Monday's fiscal statement, which will mark a start to the new government's budgeting process that culminates in an Autumn budget statement.

Reeves said taxes on foreign-born people with property in Britain, or "non-doms," would be raised as promised, and on energy companies.

She said Britain supports the G20 discussions in Rio de Janeiro on making tax systems more progressive so that the ultra-wealthy pay their fair share, but cautioned against going too far and chasing away entrepreneurs.

She said, "You've got to strike the right balance on this. I want the new Labour government to be pro-growth, pro-wealth creation. You've got to get the balance right."

The new chancellor also said she saw progress in talks on the "Pillar 1" arrangement to reallocate taxing rights for large multinational companies, adding that if momentum can be maintained, she was confident that remaining issues could be resolved by the autumn of this year.

(Reuters)

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  • UK life sciences sector contributed £17.6bn GVA in 2021 and supports 126,000 high-skilled jobs.
  • Inward life sciences FDI fell by 58 per cent from £1,897m in 2021 to £795m in 2023.
  • Experts warn NHS underinvestment and NICE pricing rules are deterring innovation and patient access.

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Britain is seeking to attract new pharmaceutical investment as part of its plan to strengthen the life sciences sector, Chancellor Rachel Reeves said during meetings in Washington this week. “We do need to make sure that we are an attractive place for pharmaceuticals, and that includes on pricing, but in return for that, we want to see more investment flow to Britain,” Reeves told reporters.

Recent ABPI report, ‘Creating the conditions for investment and growth’, The UK’s pharmaceutical industry is integral to both the country’s health and growth missions, contributing £17.6 billion in direct gross value added (GVA) annually and supporting 126,000 high-skilled jobs across the nation. It also invests more in research and development (R&D) than any other sector. Yet inward life sciences foreign direct investment (FDI) fell by 58per cent, from £1,897 million in 2021 to £795 million in 2023, while pharmaceutical R&D investment in the UK lagged behind global growth trends, costing an estimated £1.3 billion in lost investment in 2023 alone.

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