Budget 2024: What are Labour’s fiscal rules and could Rachel Reeves change them to raise more money?
Chancellor Rachel Reeves will deliver her first budget at the end of October, providing the first chance for her to change the fiscal rules.
Upon entering government in July, the government said the Conservatives left it with a £22bn black hole, so the chancellor is expected to use the 30 October budget to raise some of that.
Ms Reeves said in November, when asked if she would consider changing the debt target, she was “not going to fiddle the figures or make something to get different results”.
However, she is being urged to alter the rules to let the government access £57bn, according to the Institute for Public Policy Research (IPPR) thinktank.
And during Prime Minister’s Questions on 9 October, Sir Keir Starmer refused to answer if he agreed with the chancellor’s November statement, prompting some to speculate the government may change the fiscal rules.
Sky News looks at what a fiscal rule is, what the Labour government’s rules are and how they could change.
Sir Keir Starmer and Rachel Reeves at the Labour conference. Pic: PA
What are fiscal rules?
A fiscal rule is a limit or restriction governments put in place to constrain how much they can borrow to fund public spending.
They can be set by an independent body but since 1997 UK governments have set their own constraints.
Rules apply to the fiscal deficit – the gap between public expenditure and tax revenues in a year – the public debt – the total amount borrowed to finance past deficits – or public spending relative to GDP.
In 2010, the Office for Budget Responsibility (OBR) was set up to remove the Treasury’s ultimate control over the forecasts that underpin fiscal policy.
The Economics Observatory said the OBR’s creation means fiscal rules should be seen as an “expression of a government’s objectives, not something that dictates those objectives”.
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What are the current fiscal rules?
The Labour Party’s manifesto laid out the new government’s fiscal rules, describing them as “non-negotiable”. They are:
1) The current budget must move into balance so day-to-day costs are met by revenues
2) Debt must be falling as a percentage of GDP by the fifth year of the forecast – this was carried over from the Conservative government.
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Will Rachel Reeves U-turn on her budget promise?
How could the fiscal rules change?
The rules themselves are not expected to change.
However, the chancellor could change how debt is calculated, which could in turn change how much debt the UK officially has and give Ms Reeves room to borrow more.
Ms Reeves told the Labour conference “borrowing for investment” is the only plausible solution to the UK’s productivity crisis.
By changing her definition of debt, she could find up to £50bn in additional headroom.
However, the Institute for Fiscal Studies (IFS) has warned against borrowing that much money.
Paul Johnson, director of the IFS, said Labour’s pledge not to increase income tax, national insurance or VAT, coupled with a promise to balance the current budget, means she will not be able to free up additional resources for day-to-day spending.
Bank of England governor Andrew Bailey introduced quantitative tightening in 2022
Quantitative Easing
An idea the chancellor is said to be weighing up is excluding the £20bn to £50bn annual losses being incurred by the Bank of England winding down its quantitative easing (QE) bond-buying programme.
Since the 2008 financial crisis, the Bank of England has repeatedly used QE to stimulate the economy and meet the 2% inflation target – creating £875bn of new money in 13 years.
During QE, the Bank buys bonds (debt security issued by the government) to push up their prices and bring down long-term interest rates on savings and loans.
Read more:
How fiscal rules are impeding long-term investments – and what Rachel Reeves can do about it
Abolishing national insurance ‘could take several parliaments’
Since November 2022, the Bank has been carrying out quantitative tightening, where it does not buy other bonds when bonds it holds mature, or by actively selling bonds to investors, or a combination of the two.
The aim is not to affect interest rates or inflation but to ensure it is possible QE can happen again in the future, if needed.
In February, the cross-party Treasury committee raised concerns quantitative tightening could have losses of between £50bn and £130bn and said it could have “huge implications” for public spending over the next decade.
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What will the budget include?
Exclude new institutions
There are suggestions the chancellor could move GB Energy and the National Wealth Fund, both created by Labour, off the government’s books.
Andy King, a former senior official at the OBR, estimates that could unlock a further £15bn for borrowing.
Exclude projects
Another option would be to exclude certain projects from the debt calculation.
Government officials have said they are working on a plan to publish estimates for how much new capital projects could stimulate growth and how much money they would generate directly for the Treasury.
Asset manager Hashdex has amended its S-1 regulatory filing for its cryptocurrency index exchange-traded fund (ETF) to include seven altcoins in addition to Bitcoin (BTC) and Ether (ETH), according to a March 14 filing.
The revision proposes adding seven specific altcoins to the index ETF — Solana (SOL), XRP (XRP), Cardano (ADA), Chainlink (LINK), Avalanche (AVAX), Litecoin (LTC), and Uniswap (UNI). As of March 17, the Hashdex Nasdaq Crypto Index US ETF holds only Bitcoin and Ether.
Previous versions of Hashdex’s S-1 suggested the possibility of adding other cryptocurrencies in the future but didn’t specify which ones.
According to the filing, the proposed altcoins additions “are decentralized peer-to-peer computer systems that rely on public key cryptography for security, and their values are primarily influenced by market supply and demand.”
The revised filing signals how ETF issuers are accelerating planned crypto product rollouts now that US President Donald Trump has instructed federal regulators to take a more lenient stance on digital asset regulation.
As part of the transition, the ETF plans to switch its reference index from the Nasdaq Crypto US Index — which only tracks BTC and ETH — to the more comprehensive Nasdaq Crypto Index, the filing said.
The asset manager did not specify when it plans to make the change. The US Securities and Exchange Commission (SEC) must sign off on the proposed changes before they can take effect.
Hashdex plans to add seven altcoins to its index ETF. Source: SEC
Related: US crypto index ETFs off to slow start in first days since listing
Accelerating approvals
In December, the SEC gave the green light to both Hashdex and Franklin Templeton’s respective Bitcoin and Ether index ETFs.
Both ETFs were listed in February, initially drawing relatively modest inflows, data shows. They are the first US ETFs aiming to offer investors a one-stop-shop diversified crypto index.
Asset manager Grayscale has also applied to convert its Grayscale Digital Large Cap Fund to an ETF. Created in 2018, the fund holds a crypto index portfolio comprising BTC, ETH, SOL and XRP, among others.
Industry analysts say crypto index ETFs are the next big focus for issuers after ETFs holding BTC and ETH listed in January and July, respectively.
“The next logical step is index ETFs because indices are efficient for investors — just like how people buy the S&P 500 in an ETF. This will be the same in crypto,” Katalin Tischhauser, head of investment research at crypto bank Sygnum, told Cointelegraph in August.
In February, the SEC acknowledged more than a dozen exchange filings related to cryptocurrency ETFs, according to records.
The filings, submitted by Cboe and other exchanges, addressed proposed rule changes concerning staking, options, in-kind redemptions and new types of altcoin funds.
Magazine: US enforcement agencies are turning up the heat on crypto-related crime
The newly reintroduced Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide (BITCOIN) Act of 2025 by Senator Cynthia Lummis would allow the United States to potentially hold over 1 million Bitcoin (BTC) in its crypto reserves.
The bill directs the government to buy 200,000 BTC annually over five years, to be paid for with existing funds within the Federal Reserve and the Treasury Department.
If signed into law, the act would allow the US to hold more than 1 million BTC as long as the assets are acquired through lawful means other than direct purchases, including criminal or civil forfeitures, gifts, or transfers from federal agencies.
Democratic lawmaker urges Treasury to cease Trump’s Bitcoin reserve plans
US Representative Gerald Connolly, a Democrat from Michigan, called on the Treasury to cease its efforts to create a crypto reserve in the United States. The lawmaker said there were conflicts of interest with US President Donald Trump and argued that the reserve would not benefit Americans.
Connolly criticized the reserve in a letter addressed to Treasury Secretary Scott Bessent, arguing that there’s no “discernible benefit” to Americans and that the move would instead make Trump and his donors richer.
Argentine lawyer requests Interpol red notice for LIBRA creator: Report
Argentine lawyer Gregorio Dalbon is seeking an Interpol Red Notice for Hayden Davis, the co-creator of the LIBRA token, which caused a political scandal in Argentina.
Dalbon submitted a request, seeking the Red Notice, to prosecutor Eduardo Taiano and judge María Servini, who are investigating the involvement of President Javier Milei in the memecoin project.
In a filing, the lawyer said there’s a procedural risk if Davis remains free. The lawyer argued that Davis could have access to funds that might allow him to go into hiding or flee to the US.
America must back pro-stablecoin laws, reject CBDCs — US Rep. Emmer
In a House Financial Services Committee hearing, US Representative Tom Emmer said that central bank digital currencies (CBDCs) threaten American values. The lawmaker called on Congress to pass his CBDC Anti-Surveillance State Act to block future administrations from launching a CBDC without congressional approval.
Emmer said at the hearing that CBDC technology is “inherently un-American,” adding that allowing unelected bureaucrats to issue a CBDC could “upend the American way of life.”
Texas lawmaker seeks to cap state’s proposed BTC purchases at $250 million
Ron Reynolds, a Democratic state representative in Texas, has proposed a cap for the state’s investment in Bitcoin or other cryptocurrencies.
The lawmaker proposed in a bill that the state’s comptroller should not be allowed to invest more than $250 million in crypto. The bill also directs Texas municipalities or counties to not invest more than $10 million in crypto.
The proposed bill follows the Texas Senate’s approval of legislation establishing a strategic Bitcoin reserve in the state.
Politics
XRP’s role in US Digital Asset Stockpile raises questions on token utility — Does it belong?
Ripple’s XRP (XRP), the third-largest cryptocurrency by market cap, gained national recognition after President Donald Trump mentioned the “valuable cryptocurrency” alongside BTC, ETH, SOL, and ADA as part of a planned US strategic crypto reserve.
Trump’s executive order on March 6 established a new structure for the altcoins — the Digital Asset Stockpile, managed by the Treasury.
While the crypto community remains divided on whether XRP is truly as valuable as President Trump suggests, a closer look at the altcoin’s utility is warranted.
XRP’s potential role in banking
Launched in 2012 by Ripple Labs, the XRP Ledger (XRPL) was designed for interbank settlements. It initially offered three enterprise solutions: xRapid, xCurrent, and xVia, all later rebranded under the RippleNet umbrella. XCurrent is real-time messaging and settlement between banks, xVia is a payment interface allowing financial institutions to send payments through RippleNet, and xRapid, now part of On-Demand Liquidity (ODL), facilitates cross-border transactions.
Only ODL actually requires XRP; the other services allow banks to use RippleNet without ever holding the token. This means bank adoption of Ripple technology does not always drive XRP’s price.
Some of the world’s largest banks have used xCurrent and xVia, including American Express, Santander, Bank of America, and UBS. There is less data on the entities that use XRP-powered ODL service. Known adopters include SBI Remit, a major Japanese remittance provider, and Tranglo, a leading remittance company in Southeast Asia.
XRP’s role in Web3
XRP is also used as a gas token. However, unlike the Ethereum network, where fees go to validators, a small amount of XRP is burned as an anti-spam mechanism.
XRP’s role in Web3 is minimal. Unlike Ethereum, Ripple does not support complex smart contracts or DApps. It offers only basic Web3 functionality, such as a token issuance mechanism and native NFT support under the XLS-20 standard, introduced in 2022.
The XRPL Web3 ecosystem is small. Its modest DeFi sector holds $80 million in total value locked (TVL), according to DefiLlama. XRPL’s tokens have a combined market cap of $468 million, according to Xrpl.to. Most of them are DEX tokens (SOLO) and memes (XRPM), as well as wrapped BTC and stablecoins.
So far, XRPL’s Web3 sector remains niche and trails true smart contract platforms like Ethereum and Solana.
Related: SEC delays decision on XRP, Solana, Litecoin, Dogecoin ETFs
Crypto pundits split hairs on XRP’s role in a strategic reserve
Ripple Labs representatives have long advocated for equal treatment of cryptocurrencies, with CEO Brad Garlinghouse reiterating this on Jan. 27.
Garlinghouse said,
“We live in a multichain world, and I’ve advocated for a level-playing field instead of one token versus another. If a government digital asset reserve is created—I believe it should be representative of the industry, not just one token (whether it be BTC, XRP or anything else).”
However, not all cryptocurrencies serve the same purpose. Bitcoin’s primary role is to be a “geopolitically neutral asset like gold,” in the words of crypto analyst Willy Woo. XRP’s purpose remains less clear, but few in the crypto space would argue that it could qualify as independent money.
This is primarily due to one of Ripple’s most uncomfortable aspects—its permissioned nature. Unlike Bitcoin or Ethereum, Ripple does not rely on miners or staked tokens to secure the network. Instead, it uses a Unique Node List—a group of trusted validators responsible for approving transactions. While this optimizes speed and efficiency, it raises concerns about censorship, corruption, and security risks.
Bitcoin proponent and co-founder of Casa Jameson Lopp didn’t hold back when discussing XRP’s potential:
“There’s Bitcoin, then there’s Crypto, then there’s Ripple. Ripple has attacked Bitcoin at a level rivaled only by BSV’s lawsuits. Ripple explicitly wants to power CBDCs. They have always been focused on servicing banks. Few projects are as antithetical to Bitcoin.”
There’s no love lost between Bitcoiners and Ripple supporters, especially after Ripple co-founder Chris Larsen partnered with Greenpeace to fund an anti-Bitcoin campaign.
However, Lopp’s comparison to CBDCs holds some weight, given XRPL’s permissioned nature. It reflects a common view in the crypto community that XRP functions more like a banking tool than a truly independent cryptocurrency.
While the XRPL blockchain sees widespread use in banking, XRP’s utility remains a point of concern. It is underscored by the fact that approximately 55% of the 100 billion pre-mined coins are still held by Ripple Labs. This concentration raises concerns about potential market manipulation and the coin’s long-term stability.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
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