Britain’s new finance minister, Rachel Reeves, told parliament that her Conservative predecessor had left public spending on track to be £21.9bn over budget this year and announced immediate cuts of £5.5bn.
Reeves forecast a further £8.1bn in cuts for the next financial year, and promised more action in the full budget on October 30, when the new Labour government will have to make “tough decisions”, including on tax.
Part of the cost comes from Reeves’ decision to give public sector workers pay rises at a total cost of £9.1bn, following recommendations from independent pay-setting bodies that it said the Conservatives had ignored.
Reeves said the state of public finances is not sustainable and poses a risk to economic stability if left unchecked.
“So it is up to us to make the tough decisions now to deliver more savings throughout the year,” he told parliament.
Reeves inherited a slow-growing economy, net public-sector debt at its highest level since the early 1960s, and a tax burden on track to reach its highest level in nearly 80 years.
He accused the previous Conservative government of covering up the true state of government spending, and said it needed to make tough decisions to prevent the budget deficit rising by 25% this year.
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