The UK government claimed the country was “broke and broken” ahead of an assessment of the public finances, according to Euractiv.
The newly elected Labour Party is expected to use the assessment on Monday 29 July to blame its predecessors for a £20 billion (€23.7 billion) deficit. The party spent much of its first three weeks in power telling the public that things were worse than expected in almost every area of public policy.
Finance Minister Rachel Reeves will set out the results of the UK budget review in a statement to Parliament accusing the Conservative Party of committing to unfunded spending in an attempt to win public support.
The assessment will show that Britain is broke and broken – revealing the mess that populist politics has made of the economy and public services. It will show that the previous government made significant funding commitments for this financial year without knowing where the money would come from.
The Conservatives dismissed Labour’s much-discussed claim of a “black hole” in the public finances as a fabricated excuse for a tax rise that they had not reported during the election campaign. Some economists also argued that there were several big surprises that Labour could not have foreseen before taking office.
Reeves will reveal the date of her first UK budget, commission independent forecasts, and outline plans for a formal spending review process. It will determine how much money each department will receive. She is also expected to agree to above-inflation pay for teachers and health workers.
However, it is unclear how Labour will tackle the identified deficit. Reeves is constrained by election promises not to raise income tax rates, National Insurance social security payments, value added tax, and corporation tax.
Senior Labour minister Pat McFadden stated:
We will not shy away from being honest with the public about the reality of what we have inherited.
