Rachel Reeves has accused the Conservatives of shirking difficult choices and exceeding their budget by tens of billions of pounds.
UK public spending is on track to surpass the budget by £22 billion ($28 billion) this year due to the Conservatives’ financial mismanagement, according to Rachel Reeves, the new Chancellor of the Exchequer, who addressed parliament on Monday.
Reeves assumed the role of finance chief after Labour secured a resounding victory in the general election in early July, marking the end of the Conservative Party’s 14-year rule.
Acknowledging the necessity of making “difficult decisions,” the chancellor announced an immediate £5.5 billion ($7 billion) in cuts, promising a further £8.1 billion ($10.4 billion) spending reduction for the upcoming financial year. Reeves also disclosed above-inflation pay raises for public sector workers, costing approximately £9.1 billion ($11.7 billion). The Conservative government’s policies had fueled worker strikes across various sectors of the public service for years.
“They avoided the tough choices. They prioritized their party over the country. The reserve was overspent by more than three times, just three months into the fiscal year, and they kept it a secret,” Reeves asserted in the House of Commons. “The magnitude of this overspending is unsustainable. Inaction is not an option,” she added.
Reeves’ Conservative predecessor, Jeremy Hunt, has accused the new chancellor of setting the stage to break her pre-election commitments and raise taxes.
“Today’s actions are not economic, they are political. She aims to blame the previous Conservative government for tax increases and project cancellations that she has been planning all along,” Hunt has claimed.
The incoming Labour government inherited a UK economy characterized by stagnant growth and the highest level of public sector net debt since the early 1960s. As per the Office of National Statistics, the country’s public sector net debt-to-gross domestic product (GDP) ratio was estimated at 99.5% in late June. According to the International Monetary Fund’s July economic outlook, GDP is projected to expand by 0.7% this year.