Chancellor’s enthusiasm ‘has never burned brighter’ – but will her plans finally boost growth?
The chancellor spent most of her first six months issuing dire warnings about the calamitous state of the public finances she inherited.
But now, in a dramatic change of tone, Rachel Reeves is celebrating the UK’s economic possibilities.
Inspired by Donald Trump’s economic boosterism, and despite the UK’s flatlining growth figures, she told Trevor Phillips she’s spent the past few days in Davos “shouting on the world stage about everything our great country has to offer”.
“My enthusiasm and excitement… has never burned brighter.”
But this optimistic message isn’t just part of a new international sales pitch, a riposte to critics who believe the chancellor damaged investor confidence in the UK with her gloomy previous prognosis.
Instead, it’s part of the government’s drive to reconnect with businesses bruised by her tax-raising budget – an attempt to demonstrate that economic growth genuinely is its number one priority – at the expense, perhaps, of all else.
Of course, the chancellor argues that growth is needed to deliver the level of public services voters expect from a Labour government – without rapid improvements to the public finances, departments are likely to face austerity-level cuts.
Now we’re finally getting more detail on the practical strategy to deliver the growth that has proved so elusive for successive governments in recent years – but many of the measures involved are highly controversial.
Read more: Reeves to seek billions from corporate pension surpluses
From reducing planning hurdles to demanding regulators strip out red tape, in some ways, the Labour government is now seeking to enact many of the policies promised by Liz Truss.
Asked about the comparison by Trevor Phillips this morning, Ms Reeves didn’t deny the similarity, arguing only that “we’re doing practical things to get that growth, not just talking about it”.
On Wednesday in a big speech on growth, we’ll hear more about these practical steps.
The biggest expected announcement is about the long-awaited expansion of Heathrow Airport, as well as plans for Gatwick and Luton.
File pic: AP
As a symbol of going for growth above all else, it couldn’t get much bigger, but the reason the project has failed to get off the ground is that so many people object to it so passionately – for a wide range of reasons, from concern over emissions and our net zero commitments to noise pollution.
Ms Reeves told Trevor Philips today the decision would be taken with “collective ministerial responsibility”.
That may be easier said than done.
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Previously, many members of the cabinet, including Sir Keir Starmer, Environment Secretary Steve Reed and Energy Secretary Ed Miliband voted against expanding the west London airport.
Supporting the plans will surely be uncomfortable for many on the Labour benches, especially with the Mayor of London so implacably opposed.
Asked this week if he’d consider resigning over it, though, Mr Miliband responded: “Don’t be ridiculous, no.”
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Reeves: ‘Happy to look at’ joining pan-EU trading group.
Perhaps the clearest indication of the government’s economic focus comes with the chancellor’s willingness to discuss the possibility of joining a European customs grouping, the Pan Euro Mediterranean Convention.
“We are absolutely happy to look at these proposals,” she told Trevor Phillips – quite a contrast to the non-committal answers given by other ministers earlier this week.
The Conservatives are predictably up in arms, with Andrew Griffiths, the shadow business secretary, quick to ring the Brexit alarm bell.
“We must avoid undoing Brexit by the back door by aligning with the EU’s low growth model,” he said.
While the prime minister has long promised a “reset” in relations with the EU, any hint of backpedalling on Brexit is so politically sensitive that discussion about moving towards a closer economic relationship is always muted.
The fact Ms Reeves is even looking into this is perhaps, more than anything, a sign of their desire to show they’re willing to consider all options.
But as with the airports, it’s likely to be a very long time before any of these pro-growth intentions have a practical impact on GDP.
The US House of Representatives has voted in favor of nullifying a rule that would have required decentralized finance (DeFi) protocols to report to the Internal Revenue Service.
On March 11, the House of Representatives voted 292 for and 132 against a motion to repeal the so-called IRS DeFi broker rule that aimed to expand existing IRS reporting requirements to crypto.
All 132 votes to keep the rule were Democrats. However, 76 of those in the party joined the Republican vote to repeal it.
This follows the US Senate’s March 4 vote on the motion to repeal, which saw it pass with a vote of 70 to 27.
The rule would force DeFi platforms, such as decentralized exchanges, to disclose gross proceeds from crypto sales, including information regarding taxpayers involved in the transactions.
Speaking after the vote, Republican Representative Mike Carey, who submitted the repeal motion, said, “The DeFi broker rule invades the privacy of tens of millions of Americans, hinders the development of an important new industry in the United States and would overwhelm the IRS.”
Congressman Mike Carey speaking after the vote. Source: Mike Carey
House Financial Services Committee Chairman French Hill also applauded the overturning of the rule, calling it “a clear example of government overreach that threatens to push American digital asset development overseas.”
The resolution will need to pass another Senate vote before being sent to President Donald Trump, who has signaled he’d support it.
Those opposing the rule repeal included Democrat Representative Lloyd Doggett, who said getting a “special interest exemption” from IRS disclosures “makes tax evasion and money laundering so much easier for wealthy Republican donors who have been using these decentralized exchanges.”
He claimed killing the rule would create a “loophole that would be exploited by wealthy tax cheats, drug traffickers and terrorist financiers.”
Related: US lawmakers advance resolution to repeal ‘unfair’ crypto tax rule
In early March, White House AI and crypto czar David Sacks said the administration would support congressional efforts to rescind the DeFi broker rule.
At the time, officials from the Office of Management and Budget wrote “This rule … would stifle American innovation and raise privacy concerns over the sharing of taxpayers’ personal information, while imposing an unprecedented compliance burden on American DeFi companies.”
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Securities exchange Cboe BZX is seeking permission from US regulators to incorporate staking into Fidelity’s Ether exchange-traded fund (ETF), according to a March 11 filing.
The filing marks Cboe’s latest attempt to support staking for the Ether (ETH) funds traded on its US exchange.
Cboe’s proposed rule change would allow Fidelity Ethereum Fund (FETH) to “stake, or cause to be staked, all or a portion of the Trust’s ether through one or more trusted staking providers,” the filing said.
The Fidelity Ethereum Fund is among the most popular Ether ETFs, with nearly $1 billion in assets under management, according to data from VettaFi.
In February, Cboe asked permission to add staking to another Ether ETF, the 21Shares Core Ethereum ETF.
Staking Ether enhances returns and involves posting ETH as collateral with a validator in exchange for rewards.
As of March 11, staking Ether yields approximately 3.3% APR, denominated in ETH, according to Staking Rewards.
Other popular cryptocurrencies, including Solana (SOL), also feature staking mechanisms.
Staking rewards by asset type. Source: Staking Rewards
Related: SEC seeks comment on in-kind redemptions for Bitcoin, Ether ETFs
Proposed rule changes
The US Securities and Exchange Commission must still approve Cboe’s proposed rule changes before staking can commence.
In February, the SEC acknowledged more than a dozen exchange filings related to cryptocurrency ETFs, according to records.
The SEC’s acknowledgments highlight how the agency has softened its stance on crypto since US President Donald Trump started his second term on Jan. 20.
In addition to staking, the filings, submitted by Cboe and other exchanges, addressed proposed rule changes concerning options, in-kind redemptions and new types of altcoin funds.
Cboe has also asked permission to list Canary and WisdomTree’s proposed XRP (XRP) ETFs and support in-kind creations and redemptions for Fidelity’s Bitcoin (BTC) and ETH ETFs, among other proposed changes.
Magazine: MegaETH launch could save Ethereum… but at what cost?
A member of the Texas legislature has proposed a bill that could limit the amount local and state authorities invest in cryptocurrency as a reserve asset.
In a bill filed on March 10, Texas Representative Ron Reynolds proposed the state’s comptroller not be allowed to invest more than $250 million of its Economic Stabilization Fund — otherwise known as a “rainy day” fund — in Bitcoin (BTC) or other cryptocurrencies. The legislation also suggested that Texas municipalities or counties could not invest more than $10 million in crypto.
HB 4258, filed by Texas Representative Ron Reynolds. Source: Texas legislature
The proposed bill followed the Texas Senate passing legislation on March 6 to establish a strategic Bitcoin reserve in the state. The SB 21 bill seemingly could allow the Texas comptroller to have no limit on purchasing BTC for a reserve, based on the most recent draft.
Related: Bitcoin reserve backlash signals unrealistic industry expectations
The plan for a strategic Bitcoin reserve in Texas was one of many separate bills proposed in US state governments following the inauguration of President Donald Trump and Republican lawmakers winning control of the US House of Representatives and Senate. Texas Lieutenant Governor Dan Patrick said in January that the state’s legislative priorities for 2025 would include a proposal to establish a Texas Bitcoin Reserve.
Is there a partisan divide on state and federal crypto plans?
It’s unclear if Rep. Reynolds, a Democrat, intended to support the BTC reserve bill introduced by State Senator Charles Schwertner, a Republican, or propose restrictions in the event the legislation becomes law. If passed and signed by Governor Greg Abbott, the bill would take effect on Sept. 1. Cointelegraph reached out to Rep. Reynolds’ office for comment but did not receive a response at the time of publication.
Though Trump signed an executive order on March 7 to create a federal “Strategic Bitcoin Reserve” and “Digital Asset Stockpile,” many legal experts have questioned the US president’s authority to enact specific policies through EOs. Wyoming Senator Cynthia Lummis reintroduced legislation on March 11 to codify the proposed BTC reserve into law in the Senate.
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