good morning. Officially, Chancellor Rachel Reeves is scheduled to unveil Labour's first budget (arguably the most important budget in all of Parliament) next Wednesday. But in reality, budget announcements have now become two-week news events. The Treasury knows that it's not a good idea to shock the market with too many surprises on the day, so this government, like previous governments, is working on an elaborate sales pitch. , make sure you have enough reporting in advance to give you a broad idea of what's going to happen. Not all of the articles you'll read this week about what's in the budget are accurate or approved by the Treasury, but a good portion of them are.
One policy that has generated much debate is a proposal to change the official definition of debt used in the government's fiscal rules. Mr. Reeves has been hinting for some time that he intends to change this, and he is expected to confirm this at an IMF meeting in Washington today.
The government is committed to reducing debt as a share of national income in the fifth year of the economic forecast (i.e. five years out). The previous government defined debt as headline public sector net debt (PSND), but when Rishi Sunak was chancellor he changed this to underlying PSND (PSND excluding Bank of England debt). This is the definition currently in use.
The Institute for Fiscal Studies recently announced good paper Today Reeves explains another definition you can choose from. Larry Elliott, Pippa Crerar and Richard Partington She says she would choose Public Sector Net Financial Liability (PSNFL). They say in the story:
This measure, which replaces net public sector debt, takes into account all of the government's financial assets and liabilities, including student loans, private company equity, and funded pension plans.
This will give the Chancellor more room to borrow more for long-term infrastructure investment…
had [Conservative chancellor Jeremy] Mr Hunt adopted the PSNFL target in March, which, if realized, would increase his borrowing capacity by around £53bn.
keir starmer Attending the Federal Government Summit (Chogum) held in Samoa, Eleni Coulaire He was asked whether changing the definition of debt would scare away investors, according to the report. Starmer Answered:
The Prime Minister also made clear in his conference speech his desire to increase investment in the economy as a result.
It is a matter of record that UK investors have previously said that investment levels in the UK are too low, both in terms of public infrastructure and business investment more generally.
Mr Starmer said the entire budget would be “unabashedly pro-business”. he said:
Investors don't need to worry about this budget. This government is prioritizing growth. It's unashamedly pro-business.
We can already see that investors are reacting positively to the government's plans, following a major vote of confidence in the UK economy at the International Investment Summit.
He also said the government's first budget would be a “significant” budget that “sets out how we intend to do business”.
The agenda for the day is:
9:30am: Cabinet Office Minister Pat McFadden takes questions in the House of Commons.
11:30am: A lobby briefing session will be held at Downing Street.
noon: Deputy Prime Minister and Housing Secretary Angela Rayner speaks at the Local Government Association.
Afternoon (UK time): Prime Minister Rachel Reeves is in New York for the IMF's annual meeting and is scheduled to give a broadcast interview.
Also, football governance bill It will be presented to the House of Lords today.
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