UK Chancellor Rachel Reeves Talks Rejecting Wealth Tax

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Michelle Hussein 0:00
Hello and welcome. This is The Michelle Hussein Show. I'm Michelle Hussein. I speak with people like Elon Musk. I think I've done enough. And Shonda Rhimes. That's so cute. This will be a place where every weekend you can count on one essential conversation to help make sense of the world. So please join me, listen and subscribe to The Michelle Hussein Show from Bloomberg Weekend, wherever you get your podcasts.
Rachel Reeves 0:27
You certainly ask interesting questions.
Lizzy Burden 0:30
Thanks for making time for Bloomberg TV and Radio, Chancellor. We've heard you say already that the public finances are in a pretty precarious position. So I want to ask you, many Labour MPs really want you to lift the two-child benefit cap, and we hear that includes the Prime Minister. Can we afford to do that?
Rachel Reeves 0:48
Well, no one needs to tell me how important child poverty is. I came into the Labour Party because I wanted children from all backgrounds to have a good start in life. We've already made strides in reducing child poverty in this Parliament. We're rolling out free breakfast clubs at all primary schools, extending free school meals to an additional 500,000 children. We've capped the cost of school uniform. We've increased the national living wage and national minimum wage. Would I like to do more? Yes. But, of course, we haven't always got to explain how policies will be paid for. We've got the report from the Child Poverty Task Force later this year and we'll respond to that. But it is important for all families that the numbers add up.
Rachel Reeves 1:32
And that's always what I've done as Chancellor of the Exchequer.
Lizzy Burden 1:35
And that's been a really strong message from you throughout. Does your party, though, understand how important it is to make the numbers add up, stand on the right side of the bond market?
Rachel Reeves 1:44
We campaigned the election on economic stability, fiscal responsibility. And we did that for a reason, because it was ordinary working people and businesses who paid the price for the economic mismanagement in the last parliament, when interest rates went through the roof, when inflation got out of control, when pensions were put in peril. And because of that, my party, the Labour Party, accepted the crucial importance of economic discipline to support working families. It's not intention, economic responsibility, to our commitments to make people better off. It is part of that commitment because those five cuts in interest rates, as you know, by the Bank of England, but they've only been possible because of that stability with return to the economy.

Why has Chancellor Rachel Reeves ruled out a UK wealth tax?

Lizzy Burden 2:26
So look, on winter fuel payments, on pay rises for doctors, on welfare reforms, you've seemed to give. But when are you going to take away? When are you going to choose the bond market over the left of your party?
Rachel Reeves 2:37
Well, if you look today at my conference speech, I'll be setting out a youth guarantee. Because at the moment, we've got a million young people who are not in education, employment or training. That's one in eight young people. I'm not going to let that stand. It is a waste of their talent and potential, but it's also a huge waste for business and a huge waste for taxpayers that we are subsidising young people to be out of work when we want them to be in training or in paid employment. And that's one example of how we're reforming the welfare state to get the costs down and at the same time bringing more people into work.
Lizzy Burden 3:12
What would you do about it if someone said they don't want to work in the care home?
Rachel Reeves 3:15
Well, that's not acceptable. Welfare is not an alternative to work. The welfare state is there if you need it. You can't say, oh, no, actually, I'd rather remain on benefits than take that job opportunity. And that's a really important part of what I'm setting out today.

What commitments has Rachel Reeves made regarding child poverty?

Rachel Reeves 3:30
It builds on what the previous Labour government did under Tony Blair with the New Deal for young people that said there was not an option just to stay on benefits. And that's the same with me as Chancellor.
Lizzy Burden 3:40
OK, look, I don't expect you to pre-empt your budget with me, Chancellor, but you did promise business that there'd be no more borrowing and no more tax rises.

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