Rachel Reeves to warn of £20bn blackhole in public finances as she ‘prepares Britain for tax rises’
25 July 2024, 23:42
Rachel Reeves is expected to 'reveal' a £20bn blackhole in the nation's public finances on Monday as she prepares Britain for tax rises.
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Labour sources told the Guardian that the Tories' spending plans did not add up, creating the blackhole.
They bemoaned the “shocking inheritance” they were left with and claimed Jeremy Hunt, the former Chancellor, campaigned for tax cuts knowing about they were not affordable.
There is particular concern surrounding the asylum system, welfare, defence, and prisons.
A Labour source told the Guardian: “On Monday, the British public are finally going to see the true scale of the damage the Conservatives have done to the public finances.
“They spent taxpayers’ money like no tomorrow because they knew someone else would have to pick up the bill. It now falls to Labour to fix the foundations of our economy and that work has already begun.”
Ms Reeves is expected to address the nation on Monday and reveal the results of a Treasury audit.
She will also reveal the date of the Budge, which is expected to take place in October.
Read More: Starmer and Sunak play nice in Labour leader's first Prime Minister's Questions
During the General Election campaign, Ms Reeves and Sir Keir Starmer repeatedly ruled out specific tax rises: income tax, national insurance, VAT, and corporation tax.
This means the Chancellor will have to turn to other potential tax rises to plug the blackhole.
It is understood some Treasury officials have suggested a tax raid on pensioners' savings. The Chancellor has also been advised to consider changes to the inheritance tax system.
Some claim Reeves and Starmer have already begun laying the groundwork for tax rises after claiming its inheritance was the “worst place since the second world war”.
Earlier today, the Prime Minister said his ministers are finding "more mess" every day.
"The hard graft of rebuilding this country has well and truly started, and it is vital that we begin immediately because the last government dropped the ball," he said.
"They left us the worst inheritance since the Second World War, and every day – every day – we’re finding more mess that they’ve left for us to clear up.
"The rot of short-sightedness and self-service that has weakened the foundations of our country."
