Chancellor Rachel Reeves has suggested that Labour manifesto commitments will be ditched amid a “significantly worse” economic inheritance than expected last year.
In an interview with the BBC, Reeves said she would prefer to increase government spending on infrastructure rather than cut taxes for Britons.
When asked whether the government would stick to manifesto commitments, Reeves struck a coy tone – suggesting that manifesto pledges not to raise income tax rates would be dropped.
“The truth is what we inherited is significantly worse,” Reeves said.
“Last year I had to address the black hole in the public finances. This year we have had the new challenge of the Office for Budget Responsibility downgrading growth forecasts.
“It would of course be possible to stick with the manifesto commitments. But that would require deep cuts in capital spending.
“The reason why our productivity and our growth has been so poor in these last few years is because governments have always taken the easy option to cut investment in road and rail projects, in energy projects, [and] in digital infrastructure.”
More to follow.