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Rachel Reeves said the previous government “covered up” things in the public finances and that Labour has inherited a projected overspend of £22 billion from the previous Tory administration.
In a speech in the House of Commons, the chancellor has accused the previous Conservative government of “covering up the true state of the public finances” as she revealed the results of the Treasury spending audit she commissioned.
Ms Reeves will reportedly cancel some road and rail projects, and also make alterations to the hospital building programme.
A new Office of Value for Money, a Labour manifesto pledge, will start work right away to identify and recommend areas where the government can save money in the current financial year, she said.
The office is expected to announce public cuts worth billions to plug the gap in the public finances that could see the cancellation of projects including the road tunnel near Stonehenge and Boris Johnson’s New Hospital programme.
But the long-waited announcement comes with
Chancellor cancels ‘unfunded transport projects’ including Stonehenge tunnel
Rachel Reeves has announced that a £150m investment fund announced by Jeremy Hunt last year has been scrapped as no projects were supported.
On leveling up, she claimed her Treasury audit found £1billion of “unfunded transport projects” from the Tories that will now be reviewed.
Ms Reeves claimed these include the Stonehenge tunnel on the A303, and the A27 Arundel bypass.
The restoring our railways scheme will also be stopped as there was no money for them.
She added the sale of the government’s owned NatWest shares will be stopped by 2025/2026.
Pictured: Jeremy Hunt reacts to Rachel Reeves announcement
Reeves unveils ‘difficult decisions’ to save up £3billion
The chancellor has announced public departments will have to save up a total sum of £3bilion to make up for the blackhole in public spending.
She said: “I ask all departments to find savings to absorb as much of this as possible at least £3billion.
“I will work with them to find savings ahead of the Autumn budget including to stop non-essential spending on consultancy and communications.
“I am taking action to find two per cent savings in their back savings costs.”
Reeves: Tories did not have enough money to support Ukraine
The chancellor has accused the previous government of having not enough money to support Ukraine.
She said spending on military support to Ukraine did not have sufficient money set aside.
But promised Labour will continue to honour the promises made.
Chancellor announces £20bn black hole in public finances
Rachel Reeves has announced the government’s funding review has found:
- A budget with “pressures” of £35bn in budget which represents £22bn “projected overspend” for the current spending year.
- The Office for Budget Responsibility was not aware of some of the spending commitments and the Tories “misled” the OBR.
- Policies on the asylum system was projected to be overspending by £6.4bn.
- The transport budget was projected to overspend by £1.6bn.
Labour ‘did not know’ real situation of public spending
Rachel Reeves said she was “honest” during the campaign around the difficult choices that the government would take with the current state of the economy.
The chancellor said the British people knew and it’s “why they voted for change”. She added it was clear there were details she “did not know” before the election.
Reeves accuses Tories of public finances ‘cover up’
The chancellor has accused the previous government of “covering up” the real state of public finances during the election campaign.
She told the Commons: “Things the party covered up from the opposition, covered up from this House, covered up from the country.”
Ms Reeves said she has set out a detailed audit for the real spending situation.
Rachel Reeves delivers speech in the Commons
Before delivering her statement, the chancellor has payed tribute to the victims of Southport.
Announcing the key points of her speech, she said she is first announcing the state of the public finances, then setting up the immediate action to deal with the inheritance and a longer term plans to fix the “foundations of the economy”.
Cooper calls for ‘major overhaul of the system’ to tackle violence against women and girls
Home secretary Yvette Cooper has said a “major overhaul of the system” is required to combat violence against women and girls.
Shadow home secretary James Cleverly said the issue “is an incredibly important agenda and it builds upon the work that the previous government, my government, put forward in this area”.
He added: “We’ve seen an increase in arrest rates for violence against women and girls, up by 25% between 2019 and 2022/23, and a 38% increase in charge rates for rape over the year-to-year period.
“But we recognise there is significant and regular under-reporting of violence against women and girls, and I want to make sure that (Ms Cooper’s) agenda doesn’t inadvertently dissuade women from coming forward.”
Ms Cooper said: “We need to be addressing the prevalence of violence against women and girls, not simply the reporting, because there are many areas where we know that reporting needs to increase.”
She added: “The thing I would just say to (Mr Cleverly) is when he talked about the increase in charge rates, if you increase a very, very small number by a little bit, it’s still a very small number. The charge rate is still way way too low.
“So, this needs a major overhaul of the system. I look forward to working with his party and to working with all parties in order to do this. But we have to be very honest with ourselves about the damage that has been done.”
PM condemns ‘horrendous and deeply shocking’ Southport stabbing
In a post on X, prime minister Sir Keir Starmer said the incident in Southport was “horrendous and deeply shocking”.
He said: “Horrendous and deeply shocking news emerging from Southport. My thoughts are with all those affected.
“I would like to thank the police and emergency services for their swift response.
“I am being kept updated as the situation develops.”
