New UK finance minister to accuse last government of multi-billion pound ‘cover-up’

By David Milliken

LONDON (Reuters) – Britain’s new finance minister, Rachel Reeves, will accuse the former Conservative government on Monday of committing to billions of pounds of spending that has not been properly budgeted for.

Elected to run the world’s sixth-largest economy in a landslide victory on July 4, Labour has spent much of its first three weeks in power telling the public that things are worse than expected in almost every area of public policy.

On becoming finance minister, Reeves ordered officials to conduct a fresh assessment of public funding needs which she will present to parliament on Monday and use to set the stage for her first formal budget statement later this year.

Labour Party sources said on Friday that this assessment had found a shortfall of around 20 billion pounds ($26 billion) and on Saturday Prime Minister Keir Starmer’s office said it would “show that Britain is broke and broken”.

Late on Sunday, the finance ministry said the audit would show “the previous government overspent this year’s budgets by billions of pounds after making a series of unfunded promises”.

Reeves will also announce a new Office of Value for Money, a crackdown on government waste, reduced use of external consultants and a sell-off of unused government property, the finance ministry said.

In her planned speech to parliament, Reeves says: “The previous government refused to take the difficult decisions. They covered up the true state of the public finances. And then they ran away.”

Britain’s Conservatives dismissed these accusations as a pretext from Labour to raise taxes, after the centre-left party had ruled out raising the rates of income tax, value-added tax and other main taxes during the election campaign.

Budget forecasts in March were signed off by the independent Office for Budget Responsibility, although there was widespread reporting of funding challenges in areas such as prisons and healthcare.

“Rachel Reeves is trying to con the British public into accepting Labour’s tax rises. She wants to pretend that the OBR … whose forecasting was used in all of the last Conservative government’s budgets, doesn’t exist,” said Gareth Davies, a Conservative lawmaker who speaks for the party on budget policy.

($1 = 0.7769 pounds)