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The UK’s public finances are suffering from a $28 billion hole that she inherited from the Conservative Party, Economy Minister Rachel Reeves said on Monday.
“We have inherited £22 billion of planned overspending this year. [28.000 millones de dólares] (…) which the opposition party covered up, the Labour Minister announced, after her party ended 14 years of Conservative government on July 4.
“If left unaddressed, it would mean a 25 percent increase in the budget deficit this year,” he told lawmakers, citing a detailed audit of public accounts. He said his first budget would be presented on Oct. 30.
“Today I will set out the urgent and necessary work I have already done to reduce that pressure on the public finances by £5.5 billion this year and more than £8 billion next year,” he said.
Reeves said the scale of overspending was “unsustainable” and failure to act was “not an option” for Labour Prime Minister Keir Starmer’s new government.
The British Prime Minister’s Office said that “the audit conducted by the new government shows that the United Kingdom is bankrupt.”
The finance minister, the country’s first woman to hold the portfolio, added that the previous executive, led by Conservative Rishi Sunak, “avoided difficult decisions” and “put the party before the country”.
The upcoming budget will seek to “fix the foundations of our economy,” Reeves said, adding that it will also launch a multi-year spending review to set departmental budgets for three years.
However, the Conservative Party has rejected Labour’s claims and claimed that the new government is using this financial assessment to lay the groundwork for tax increases.
During the election campaign, Labour promised that it would not raise major taxes on workers.
The UK’s deficit was about $152 billion in the 12 months to the end of March, the country’s last financial year.
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