Rachel Reeves, the Chancellor, is exploring changes to the government’s borrowing regulations, potentially freeing up as much as £50 billion to fund major projects like housing and renewable energy.
Economists estimate that had such rules been in place during the last budget, it could have provided an extra £50 billion in borrowing capacity.
To support Labour’s plans for increased public spending, Reeves is also expected to raise taxes on capital gains and reform inheritance tax rules. However, she is revisiting another budget measure after warnings that her proposal to eliminate tax perks for non-domiciled individuals might not yield the anticipated £1 billion in annual revenue.
Reeves has also vowed to tackle the barriers slowing down housebuilding, promising to eliminate the “blockers” in the current system during her speech at Labour’s annual party conference.
Reeves emphasised the need to “rip out the blockages” that frustrate builders, reiterating Labour’s goal to construct 1.5 million homes during this parliamentary term. A Treasury spokesman said:
“The budget will be built on the rock of economic stability, including robust fiscal rules that were set out in the manifesto. These includes moving the current budget into balance, so that day-to-day costs are met by revenues, and debt falling as a share of the economy by the fifth year.”
