SNP demand apology as Labour set to admit £20bn in cuts and tax hikes

The Chancellor will on Monday set out the results of the spending audit she ordered Treasury officials to produce.

Her update will reveal “the true scale of the damage the Conservatives have done to the public finances,” a Labour source said.

READ MORE: Analysis shows what Labour's cuts plans could buy for Scotland

It comes after the SNP repeatedly warned that Labour's plans would mean around £18bn of cuts to public services or tax rises during the General Election – pointing to analysis from the Institute for Fiscal Studies (IFS).

Senior Labour figures, including Keir Starmer and Anas Sarwar, denied this, with the Scottish Labour leader accusing the SNP of spreading "misinformation and lies" and "ludicrous claims and attacks".

But now, the party did not deny reports that an early assessment has found a nearly £20bn annual gap between revenues and funding commitments, including in areas such as asylum and public sector pay.

The figure could still shift as each department’s spending commitments are assessed before Reeves's Commons statement.

Both Anas Sarwar and Keir Starmer previously dismissed the SNP claims (Image: Andrew Milligan)

The SNP’s Westminster leader Stephen Flynn has now written to Reeves.

“At minimum, you should apologise for misleading voters,” he said.

“If Labour's election campaign was a product in a shop, voters would be due a refund for false advertising.”

Flynn added: “More importantly, you must now come clean on where the axe will fall under your plans and whether you intend to cut public services, raise taxes or both - having previously denied you would do either."

Any tax hikes to plug the shortfall in spending for essential public services are not expected before the autumn budget, the date of which Reeves is also set to announce on Monday.

Labour has ruled out lifting income tax, VAT, national insurance and corporation tax, but changes to capital gains or inheritance levies may be on the table.

Asked about the black hole at a meeting of G20 finance ministers in Brazil, Reeves said: “I’ll give a statement to Parliament on Monday, but I have always been honest about the scale of the challenge we face as an incoming Government, and let me be crystal clear: we will fix the mess we have inherited.”

READ MORE: New analysis proves Labour WILL impose austerity in power, SNP say

The Labour source said: “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.”

As she presents the findings of the audit, Reeves is expected to confirm the plans of her Tory predecessor Jeremy Hunt would require significant cuts to already cash-strapped public services.

The Chancellor is widely expected to be forced to raise taxes in the budget to avoid the spending squeeze implied by the existing plans and to meet her fiscal rule to have debt falling as a share of gross domestic product in five years’ time.

Flynn continued his criticism of the potential move in the letter: “People in Scotland voted for change and that means an end to fourteen years of Westminster austerity cuts, a meaningful funding boost to our NHS and public services, action to eradicate child poverty and raise living standards - and infrastructure investment to boost economic growth and deliver affordable homes, quality transport links and our green energy future.”

He added: “Will you now give a cast-iron commitment that there will be no cuts to public services, as you promised at the election, and that public services will get the major funding boost they need at the budget in October? Or will you break your promise and allow public services to decline?”