Chancellor Rachel Reeves said there was a £22 billion black hole in the public finances as she accused the Tories of covering up the scale of the problems.
In a statement to Parliament she set out “immediate action” to address the issues she said had been uncovered by the audit ordered by Labour when it took office.
She told MPs: “Before the election, I said that we would face the worst inheritance since the Second World War.
The Conservatives left us with the worst inheritance since the Second World War.
Today I will set out how this new Labour government will fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off.
— Rachel Reeves (@RachelReevesMP) July 29, 2024
“Taxes at a 70-year high, debt through the roof, an economy only just coming out of recession.
“I knew all of these things. I was honest about them during the campaign.”
But, she added there were things the Tories had “covered up from the country”.
She said there was a “£22 billion hole in the public finances now, not in the future, but now”.
In a statement to Parliament the Chancellor said:
– A Budget on October 30 will involve “difficult decisions” on spending, welfare and tax.
– The projected overspend by the previous Tory government on the asylum system, including the “failed” Rwanda plan, was more than £6.4 billion for this year alone.
– Winter fuel payments will be restricted to those on pension credits or other means-tested benefits.
– Ministers will accept in full the recommendations of the independent pay review bodies, saying this is the “right decision for the people who work in, and most importantly, the people who use our public services”.
– Meeting the recommendations means a £9 billion unfunded overspend, which she has asked Government departments to help fund by finding savings of at least £3 billion – including by stopping non-essential spending on consultancy and communications.
– The Government has agreed a pay offer to junior doctors, the Chancellor has confirmed, amid reports this would be more than 20% over two years.
– Rishi Sunak’s Advanced British Standard will be scrapped, as the former prime minister “didn’t put aside a single penny to pay for it”.
– Adult social care charging reforms delayed by the Tories will not be taken forward, saving more than £1 billion by the end of next year.
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