Rachel Reeves: “It is time to level with the public and tell them the truth”

• Chancellor to pledge to ‘fix the foundations of our economy’ as she unveils the spending inheritance left by the previous government.
• Reeves to set out reforms to deliver economic stability and protect the public finances, as she announces date of Budget later this year.
• Office of Value for Money formed to challenge government to deliver better value for money for taxpayers.

Chancellor of the Exchequer Rachel Reeves will this afternoon (Monday 29 July, after 3:30pm) vow to ‘fix the foundations of our economy’ as she publishes an audit of the spending inheritance left by the previous administration.

Accusing the previous government of ‘covering up the true state of the public finances,’ the Chancellor will announce immediate action to restore economic stability and deliver departmental savings this financial year.

The announcements will be a response to the findings of the Treasury’s spending audit, which shows that the previous government overspent this year’s budgets by billions of pounds after making a series of unfunded promises.

The Chancellor will confirm that she has commissioned an Office for Budget Responsibility forecast to coincide with a Budget and Spending Review to be held later this year.

The Budget will set out how the government’s robust fiscal rules will be met: balancing the current budget so that day-to-day costs are met by revenues and getting debt falling as a share of the economy by the fifth year of the forecast.

Speaking in the House of Commons later today, the Chancellor of the Exchequer Rachel Reeves is expected to say: “Before the election, I said we would face the worst inheritance since the Second World War.

“Taxes at a seventy year high. Debt through the roof. An economy only just coming out of recession. I knew all those things. I was honest about them during the election campaign. And the difficult choices it meant.

“But upon my arrival at the Treasury three weeks ago, it became clear that there were things I did not know. Things that the party opposite covered up from the country.”

She will add: “It is time to level with the public and tell them the truth.

“The previous government refused to take the difficult decisions. They covered up the true state of the public finances. And then they ran away. I will never do that.

“The British people voted for change and we will deliver that change. I will restore economic stability. I will never stand by and let this happen again.

“We will fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off.”

The Chancellor will announce she is committing the government to one major fiscal event per year to put an end to ‘surprise budgets’ which have previously caused uncertainty for both the markets and family finances across the country.

A new Office of Value for Money will be established, using pre-existing civil service resource, to put an end to wasteful spending in government, providing targeted scrutiny of public spending so that value for money governs every decision government makes.

The Office will immediately begin work on identifying and recommending savings for the current financial year, while also establishing where targeted reforms of the system can ensure that poor value for money spending is cut off before it begins.

Reforms bearing down on waste in the public sector will also be announced today, driving efficiency through government departments and arms length bodies (ALBs). Immediate action will be taken to stop non-essential spending on consultants, alongside disposing of surplus estates and hastening delivering admin efficiencies in departments.

Earlier this month, the Government introduced the Budget Responsibility Bill at the King’s Speech to deliver economic stability by guaranteeing that never again can a government play fast and loose with the public finances.

The Bill ensures all significant fiscal announcements on tax or spending which are worth more than 1% of the UK’s GDP will be subject to scrutiny by the independent Office for Budget Responsibility. This will guard against large-scale unfunded commitments in the future.

FORMER Tory Chancellor Jeremy Hunt said the new Labour government is ‘peddling nonsense’. He added: “The books were wide open and what they show is a healthy, growing economy.”

The Conservatives claimed throughout the recent election campaign that Rachel Reeves secretly plans to raise taxes.