Conservative leader Kemi Badenoch is set to warn in a speech that Chancellor John Healey’s upcoming budget will inflict deeper damage on the country than the previous fiscal plans introduced by Rachel Reeves, unless the government implements sweeping spending reductions.
Ahead of the budget delivery, Treasury insiders have signalled that plans to raise capital gains tax have been entirely dropped. Initial speculation suggested a hike on the sale of secondary properties and shares would serve as a major revenue-generating tool, with several senior cabinet allies lobbying for the measure to help stabilize public finances.
However, the chancellor ultimately decided against the proposal following warnings that higher levies could backfire if wealthy investors chose to leave the country or delay selling assets. As a result, the primary revenue raiser in the upcoming fiscal package is expected to be a targeted tax raid on banks, which will help finance a temporary cost-of-living support package. Additionally, reports indicate that Healey will reduce the government’s financial buffer against future economic shocks from £23 billion down to approximately £15 billion.
In her morning address, Badenoch is expected to argue that while Healey differs from Reeves, his reluctance to cut spending risks steering the economy in a more perilous direction. Critics in Whitehall have characterized the upcoming announcement as an attempt to minimize disruption and avoid bold measures, but the opposition argues that Britain can no longer afford to avoid addressing its structural challenges.
The Conservative party has outlined its own proposals to reduce public expenditure by £70 billion annually, arguing that the current administration must follow suit and commit to living within its financial means.