LONDON (AP) —
Britain's new Treasury chief is alleging that the previous government covered up the dire state of the nation's finances, as she prepares to deliver a major speech to Parliament on Monday that is widely expected to lay the groundwork for higher taxes.
In extracts of her speech released late Sunday, Rachel Reeves professed shock at the scale of the problems she discovered following a department-by-department review of public spending commissioned shortly after she took office three weeks ago. In a post on the social media platform X on Monday, the Labour Party confirmed that the Treasury review has identified a 20 billion-pound ($26 billion) shortfall in the public finances.
"It is time to level with the public and tell them the truth," Reeves will tell the House of Commons. "The previous government refused to take the difficult decisions. They covered up the true state of the public finances. And then they ran away."
Prime Minister
Keir Starmer 's left-leaning Labour Party won a landslide election victory earlier this month, ending 14 years of Conservative Party rule. During the campaign, critics accused both parties of a "conspiracy of silence" over the scale of the financial challenges facing the next government.
The extracts of Reeves' speech didn't include any mention of potential tax increases, though analysts speculate that any such measures won't be introduced until the government unveils its budget later this year.
Instead, Reeves focused on efforts to rein in spending, saying a new office will immediately begin identifying "wasteful spending." She also plans to stop non-essential spending on consultants and sell off surplus property. Some transport projects where funding has yet to be determined could also be axed, or at least postponed.
The government has argued that the military had been "hollowed out" at a time of increasing global threats and that the National Health Service has been "broken," with some 7.6 million people waiting for care.
And despite billions spent to house migrants and combat the criminal gangs ferrying migrants across the English Channel on dangerous inflatable boats, the number of people making the crossing is still rising, Starmer's office said. Some 15,832 people have crossed the Channel on small boats already this year, 9% more than during the same period in 2023.
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