Britain’s finance minister calls for spending discipline but no return to

Liverpool, ENGLAND — U.K. Finance Minister Rachel Reeves vowed on Monday that Britain will not return to austerity, but said she would make hard choices as she lays out budget proposals next month.

“It will be a budget with real ambition … a budget to deliver the change we promised. A budget to rebuild Britain,” she told a crowd of Labour party delegates Monday. “There will be no return to austerity.”

Her keynote speech, briefly interrupted by heckles from a pro-Palestinian protester in the crowd, came as Labour kicked off its annual party conference on Monday — its first in power for 15 years.

The ruling Labour government has faced criticism for generating an atmosphere of doom over the state of the public finances, with Prime Minister Keir Starmer warning of “painful” decisions after the party rallied to victory in the July general election.

U.K. national debt is currently running at 100% of gross domestic product for the first time since 1961, fresh data from the Office for National Statistics showed Friday. In the financial year to August, the deficit totalled £64.1 billion ($85.4 billion) — £6.2 billion more than the ONS forecast in March.

Reeves has suggested that taxes are likely to rise at her upcoming Oct. 30 Autumn budget after discovering a £22 billion ($29 billion) “black hole” in the public finances. Her predecessor Jeremy Hunt, from the rival Conservative Party, has denied the claims as “fictitious.”

“I know that you are impatient for change. But because of that legacy inherited by the Conservatives, the road ahead is steeper and harder than we expected,” she told the audience Monday.

Still, Reeves sought to strike a tone of positivity, saying “my optimism for Britain burns brighter than ever. My ambition knows no limits.”

Reeves defended a divisive move earlier this month to cut winter fuel allowances for millions of pensioners as the “right decision in the circumstances we inherited.”

However, she reiterated that the government would not raise income tax, the National Insurance social security payments, value-added tax (a sales levy) and corporation tax.

Instead, she vowed to raise additional revenues by eradicating the U.K.’s non-dom tax concession and clamping down on forms of tax avoidance and tax evasion.

“This government will not sit back and indulge those who do not pay the taxes they owe,” she said.

The finance minister also restated the government’s position as “proudly pro-business,” referencing plans next month to host a business summit and announce proposals for a new national industrial strategy. That, she said, would include measures for Britain to reach its net zero and clean energy goals by 2030.

Additionally, she said that the government would continue to pursue trade deals to “open up new markets,” as…