RACHEL Reeves has warned she will have to make “difficult decisions” following claims from a minister that the UK's finances are "worse than we thought".
During the General Election campaign the Institute for Fiscal Studies (IFS) hit out at the Labour Party after a then shadow minister claimed the public finances may be bleaker than expected once they "open the books".
Paul Johnson, director of the IFS, rubbished the claim and said that the finances of the UK were already "fully transparent."
Indeed, Reeves herself previously said that her party would have no excuse for changing its policies on the economy when coming into government due to the existence of the Office for Budget Responsibility (OBR).
“We’ve got the OBR now,” she told the Financial Times.
“We know things are in a pretty bad state. You don’t need to win an election to find that out”.
READ MORE: SNP ask 'Why not Scotland?' as UK hosts European nation leaders at EPC
However, Labour MP and Leader of the House of Commons Lucy Powell told Laura Kuenssberg over the weekend that "things are even worse than we thought".
Speaking on Sunday with Laura Kuenssberg, she said: "It is I'm afraid the case that when we have opened the bonnet, when we have looked under the bonnet, things are even worse than we thought and we are going to have to take action."
Now, Reeves has issued a warning about the "scale of the challenge" the UK is facing with its finances.
In an interview with Bloomberg TV on Thursday, she said: “I’m not going to announce any tax breaks or tax changes without saying where the money is going to come from, and we will have a budget later this year.
“But I also just need to be really clear and honest about the scale of the challenge that we’ve inherited with the public finances.
“We’re going to have to make difficult decisions. We need to fix the foundations before we can start rebuilding things in Britain.
“But unlike the previous government, I am going to be honest about the scale of the challenge. I’m going to level with people.”
The Chancellor is set to announce the date of her first budget before the Commons summer recess, as well as an assessment of the “spending inheritance” left behind by the Conservatives.
The Chancellor said the party’s plans to grow the economy “depend on businesses and investors choosing Britain as a place to invest”.
READ MORE: MEP blasts Ursula von der Leyen's 'hypocrisy on Israel' in powerful speech
She pointed to the new Budget Responsibility Bill, introduced in the Commons on Thursday, as a means of delivering the economic stability required by investors.
The law forces ministers to consult the budget watchdog, the Office for Budget Responsibility (OBR), on major tax and spending changes.
Asked whether Labour’s plans had been welcomed by investors, Reeves said:
“Absolutely. There’s no plans that I can draw up in my new office in the Treasury that are going to work unless we have business buy-in.”
Downing Street earlier said the outcome of the spending audit the Chancellor ordered Treasury officials to produce would come “shortly”.
The Prime Minister’s spokesman indicated the OBR has not been given the required 10 weeks’ notice to provide an independent forecast ahead of the next budget.
“The Treasury would announce that in the usual way,” the official said.
Why are you making commenting on The National only available to subscribers?
We know there are thousands of National readers who want to debate, argue and go back and forth in the comments section of our stories. We’ve got the most informed readers in Scotland, asking each other the big questions about the future of our country.
Unfortunately, though, these important debates are being spoiled by a vocal minority of trolls who aren’t really interested in the issues, try to derail the conversations, register under fake names, and post vile abuse.
So that’s why we’ve decided to make the ability to comment only available to our paying subscribers. That way, all the trolls who post abuse on our website will have to pay if they want to join the debate – and risk a permanent ban from the account that they subscribe with.
The conversation will go back to what it should be about – people who care passionately about the issues, but disagree constructively on what we should do about them. Let’s get that debate started!
Callum Baird, Editor of The National
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereLast Updated:
Report this comment Cancel