I'm here with the Chancellor of the Exchequer of the United Kingdom, Rachel Reeves at Tenser Reeves. Thank you so much for being with us. You're heading into a pretty tough budget season. There is the expectation that taxes are going to have to go up and that spending is going to have to cut. How much head room are you're looking to build for yourself so you don't have to do this again in terms of raising taxes again and going through another round of cuts.
I think the British people recognize that the last year has been a challenging one, whether it is conflict in the Middle East, Russia's continued aggression in Ukraine, the need for hire defense spending, and also increasing trade barriers around the world have put trees under a lot of pressure and no country, including the UK, is immune from that.
But I've also been really clear that we will continue to meet the fiscal rules that I set out in my budget at last year, and we will get debt down as a share of our economy, We will bring down the deficit and we will balance day to day spending with tax receipts. And when we get the full forecasts from the Independent Office for Budget Responsibility. We will make sure that we are continuing to achieve those things. In terms specifically of the headroom. The headroom has been
lower in the past. It was as low as six and a half billion pounds in the last parliamentary session. Obviously a more headroom would would be good, but there's always trade offs because of course to build more headroom you would have to increase taxes further, you're cut spending further. But we'll continue to manage that balancing act. But I recognize that in a world as volatile as it is today, having a bit more of a buffer can help absorb shocks.
You've talked about raising the taxes and in a previous interview you were talking about particularly targeting wealthy residents of the United Kingdom. Is that really the focus right now? Is it broader based in terms of the tax rays you have in mind?
In the budget last year I did increase taxes on some of the wealthiest and we also increase taxes on business. I'm very mindful again to get the balance right. We want to attract talent to the UK and keep talent in the UK. I also want to make it easier for businesses to grow and stay in Britain. So I'll set out the individual taxes on November twenty sixth, but I want this to be a pro growth budget that maintains Britain as a great place to start and grow
a business and to bring in investment. And obviously over the last few months we've secured huge amounts of foreign direct investment, including from the United States, with those big technology companies investing in Britain.
There's been a concern that if taxes go up too much on businesses, people start to leave and individuals will leave, and that there's been some anecdotal evidence of that. Just personally when I meet people from London in New York, I'm just wondering, have you kind of growt aware of that, tried to reduce how much you lean on that lever.
Well, we need some further changes to the tax arrangements for non domicile people earlier this year, which I think have been welcomed. We'll continue to monitor the response to any tax but I would also say there are many people choosing to make Britain their home. We've just doubled the number of visas available for high net worth individuals for entrepreneurs and for academics in some of the growth sectors to build teams in the UK, and we no doubt that people will apply for those visas and we
will fill those places. So the UK remains an attractive place in part because we are securing investment from the world. We're reforming our capital markets to make it easier for businesses to raise finance in London, and we're reforming our regulator and planning systems to make it easier to get things done in the UK.
How much you plan to cut some of the welfare spending in particular and not just sort of day to day spending of the government.
Well, it is important to make sure that all budgets included in the welfare budget are well managed, and we do need to see reform of our welfare system when we will continue to make the case with that reform. We've already brought in some changes to something called the universal Credit system to reduce the incentives to get the health related element of that, and they're just a couple
of weeks ago. I announced a youth guarantee to help young people not in education, employment and training get back into work. Like many countries around the world, particularly since the pandemic, we have experienced challenges in terms of youth unemployment and youth in activity, and we're determined to turn that around with particular programs targeted at those young people.
One big question for a lot of people is the Office for a Budget Responsibility and what they'll come out with in terms of grading the growth forecast for the United Kingdom. Do you have any expectation or understanding of what that growth downgrade looks like.
Well, the Office of Budget Responsibility, like other forecasters, use the past productivity performance to forecast the future, and it is true that under the previous government over the last fourteen years, both growth and productivity were underwhelming, and the Office Budget Responsibility will update their predictions for the future based on the past, and it's my job as Chancellored
to try and beat those expectations. And that's why we're pursuing policies on trade, investment, on planning, on permitting, on regulation and capital market reform, as well as through the trade deals that we're securing to make sure that our economy is well suited to benefit from global investment, from business and wealth creation. And that's what we'll continue to do.
Tanes the Reeves, thank you so much for taking the time.
Thank you.
That was arichel Reeves, the Chancellor of the Exchequer in the United Kingdom.