Ahead of likely exit, UK’s Reeves defends record and stresses stability

BRITAIN’S finance minister Rachel Reeves, likely to be replaced this month once Andy Burnham becomes prime minister, stressed the need for stability in the public finances and defended her decisions in remarks published on Tuesday (Jul 14).

Reeves said Britain’s economy was strong because of choices she had made since the Labour Party came to power under Keir Starmer two years ago, adding that there had been progress in delivering on promises of change.

“That change is only possible if we maintain the credibility that we have earned, and the stability that we have built, with growth and opportunity in every town, city and region of the UK,” Reeves said in a preview of her annual Mansion House speech to the finance industry.

Burnham is expected to be formally announced as Labour leader on Friday and will be officially named as prime minister on Jul 20.

The former Greater Manchester mayor has set out ambitions to spur “good growth in every postcode”, accelerate the decentralising of power away from London and increase the stock of social housing.

Burnham has said his plans will stay within the existing fiscal rules set out by Reeves and his party’s 2024 election manifesto that ruled out tax hikes on working people.

Britain’s economic performance under Reeves fell short of early hopes to “kickstart” economic growth, although it has outpaced European counterparts in the Group of Seven advanced economies since mid-2024, while lagging behind the US and Canada.

Reeves’ successor looks unlikely to have an easier task. A weakening growth outlook and rising inflationary pressure, the latter compounded by renewed conflict in the Middle East, are weighing on the public finances.

In her speech, Reeves will reassert her belief in building the closest possible economic relationship with the European Union and backing Britain’s adoption of AI technology, the finance ministry said.

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Energy Secretary Ed Miliband is the bookmakers’ favourite to succeed Reeves, who is Britain’s first female chancellor of the exchequer.

Pat McFadden, secretary of state for work and pensions, and Wes Streeting, a former health secretary, are also in the running. REUTERS