Rachel Reeves set to push ahead with plans to borrow money to invest in infrastructure despite the rising cost of government debt
Rachel Reeves will push ahead with plans to borrow money to invest in infrastructure despite the rising cost of government debt.
The Chancellor will change how the Treasury accounts for capital spending in order to reflect the benefits of investment.
Labour has committed to balancing day-to-day expenditure with tax income, and getting debt falling as a share of the economy by the end of this Parliament.
But Ms Reeves is hoping to change the debt measurement to account for the value of the assets the government holds, such as schools and hospitals, the Guardian reported.
The move, which will be confirmed to the Office for Budget Responsibility (OBR) this week, will free up tens of billions of capital spending under the new rules.
Rachel Reeves will push ahead with plans to borrow money to invest in infrastructure despite the rising cost of government debt (pictured at Labour conference)
Labour has committed to balancing day-to-day expenditure with tax income, and getting debt falling as a share of the economy by the end of this Parliament (pictured: The Treasury)
But earlier this week experts warned Ministers about the rising cost of government debt.
Since mid-September, the annual interest rate on a 10-year government bond has risen from 3.75 per cent to 4.2 per cent amid concerns about Reeves’ budget plans.
Mark Dowding, the chief investment officer at RBC BlueBay Asset Management, told the Financial Times on Monday: ‘Rachel Reeves needs to walk a tightrope, otherwise the gilt market will limit her ability to deliver much of Labour’s agenda.’
In a report for the IPPR think tank, Former Treasury minister Lord Jim O’Neill said: ‘This highlights how Labour can implement its fiscal rules in a way that embeds a more long-termist approach.
‘Focusing on a more comprehensive debt metric – such as public sector net worth – would provide greater room for borrowing to invest in line with more credible transparent rules on deficits and debt.
‘It would also bring fiscal rules more in line with how financial markets think about fiscal sustainability.’
Ms Reeves is scrambling to find ways to raise revenue to help fill a claimed £22billion hole in the books and fund Labour’s policy commitments.
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Boris Johnson reveals shocking state Downing Street was in when he moved in after Theresa May
Boris Johnson has said he refurbished the Downing Street flat when he moved in after Theresa May because it looked like a ‘crack den’.
The former prime minister oversaw a controversial refurbishment of the flat above 11 Downing Street when he moved in with his wife Carrie back in July 2019. It was partly funded by a donation from Tory peer Lord Brownlow.
Defending the renovations, Mr Johnson told LBC today: ‘The whole thing looked like a bit of a crack den, to be totally honest with you, and it needed to be refurbished.’
Mr Johnson entered Downing Street after taking over from Theresa May, who had lived in the flat with her husband Philip, since 2016.
The ex-Tory leader denied the cost of the refurbishment reached £200,000 and said it was ‘total rubbish’ that the wallpaper was gold.
‘It wasn’t gold wallpaper. I’m not a great expert on wallpaper — and I paid for it!’, he added.
Boris Johnson has said he refurbished the Downing Street flat when he moved in after Theresa May because it looked like a ‘crack den’ – Mr Johnson pictured speaking at a campaign event at the National Army Museum on July 2 this year
Mr Johnson entered Downing Street after taking over from Theresa May (pictured), who had lived in the flat with her husband Philip, since 2016
Luxury interior designer Lulu Lytle was brought in to transform the flat after it was dubbed a ‘John Lewis nightmare’ by Carrie due to furniture left behind by its former occupants.
The controversy became known as ‘wallpapergate’.
In 2021, the Conservative party was fined £17,800 by the Electoral Commission after failing to accurately report a donation of £52,000 from a firm where Lord Brownlow, of Shurlock Row, was a director.
Lord Geidt, the ministerial standards adviser, found Mr Johnson did not breach the ministerial code but acted ‘unwisely’ in allowing the refurbishment to go ahead without ‘more rigorous regard for how this would be funded’.
Mr Johnson later said he covered all the costs of the refurbishment at his own expense and told LBC on Tuesday: ‘I paid for it’.
Luxury interior designer Lulu Lytle was brought in to transform the flat after it was dubbed a ‘John Lewis nightmare’ by Carrie (pictured right)
Speaking today, Mr Johnson weighed in on the freebies row surrounding Sir Keir Starmer.
The Prime Minister has come under fire for accepting £32,000 from Labour peer Lord Alli towards clothing and glasses, as well as clothing for his wife Victoria.
Mr Johnson said: ‘It’s unbelievable. I mean, the guy, he’s a silk, right? I mean, he must be worth a bob or two. Why has he got some guy paying for his spectacles?’
It comes amid questions about the PM’s use of the Labour peer’s £18million penthouse flat in Covent Garden, central London, including he and his family living there during the election. That freebie was valued at £20,437 for a near seven-week stay.
Meanwhile, Deputy Prime Minister Angela Rayner registered an £8,500 donation from Lord Alli in November 2023, listed as a ‘donation to support me in my capacity as Deputy Leader of the Labour Party’. Another for £8,250, registered in April this year, was listed the same.
A third given to her by the Labour peer, for £3,550 in June this year, later turned out to be clothes after initially being listed simply as ‘donation in kind’.
Sir Keir registered £16,200 in gifts from Lord Alli in May this year and did record it as being for ‘work clothing’ in the MPs’ register of interests. He registered £2,485 for ‘multiple pairs of glasses’ in the same month.
The Prime Minister was accused of ’empty promises’ and ‘hypocrisy’ in a letter from Tory frontbencher John Glen, Shadow Paymaster General, last month.
