Chancellor Rachel Reeves has launched a blistering attack on her predecessors, accusing former Conservative ministers of 'sticking the boot in' on the nation's economy and leaving public finances in a perilous state.
In a stark warning ahead of the upcoming Budget, Ms Reeves revealed that a top-level spending audit has uncovered a staggering £22 billion black hole in the government's plans. This massive shortfall is forcing a brutal Whitehall-wide squeeze, with every department ordered to urgently identify savings.
A Legacy of 'Recklessness'
The Chancellor did not mince her words, describing the inheritance from the previous government as the 'worst since the Second World War'. She pointed to a toxic combination of unfunded spending commitments and maxed-out departmental budgets that have left the Treasury with virtually no room for manoeuvre.
This dire financial situation means that despite Labour's ambitious plans for growth, there is no extra cash available for public services without corresponding cuts elsewhere or new sources of revenue.
The Hunt for Savings
In response to the crisis, Chief Secretary to the Treasury, Darren Jones, has written to all cabinet colleagues demanding a thorough spending review. Departments are now scrambling to find efficiencies, with a focus on:
- Scrutinising all existing projects and programmes for potential savings.
- Halting or delaying non-essential spending.
- Re-evaluating consultancy and outsourcing contracts.
- Identifying any underspends that can be reallocated.
The goal is to build a firmer, more responsible foundation for the Autumn Budget, but it signals a period of severe fiscal restraint for the new government.
Tax Rises on the Horizon?
The revelation of the £22bn shortfall has ignited fierce speculation about potential tax increases. While the Chancellor has emphasised a desire to focus on growth rather than immediate tax hikes, the sheer scale of the financial challenge makes it a central topic in Budget deliberations.
Business leaders and economists are watching closely, concerned that both corporation tax and other business taxes could be targeted to fill the void left by the previous administration's policies.
As the spending review continues, the Chancellor's message is clear: the path to economic recovery will be fraught with difficult decisions, all stemming from what she characterises as the 'recklessness' of the past 14 years.
