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Rachel Reeves will vow to “fix the foundations of our economy” in a much anticipated speech to parliament today in which she will reveal the date of the budget and prepare the ground for spending cuts.
Accusing the previous government of “covering up the true state of the public finances” the Chancellor is expected to set out a slew of new measures which will involve to spending cuts “within the financial year”.
This will be delivered through a new Office of Value for Money, which, the government claims, will tap already existing civil service resources to “put an end to wasteful spending in government” and scrutinise the budgets of all government departments.
As part of the cost-cutting drive, all “non-essential” spending on consultants will be scrapped, and any surplus property or estates will be sold off.
Reeves will also restrict the government to one major fiscal event a year, which she said will put an end to the surprise fiscal policy that “caused uncertainty for both the markets and family finances”.
“The previous government refused to take the difficult decisions. They covered up the true state of the public finances. And then they ran away. I will never do that,” Reeves will say. “We will fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off.”
The new Chancellor is also expected to unveil the date of the new Budget and Spending Review, and confirm that she has commissioned an Office for Budget Responsibility forecast.
OBR forecasts tend to take a minimum of twelve weeks to conduct, meaning the date of Reeves’ debut Budget is unlikely to be any earlier than mid October.
The Chancellor has arranged the speech in Parliament to respond to the findings of a Treasury spending audit, which is expected to say there is an £18bn “black hole” in the government’s finances, after the Conservative administration overspent its most recent budgets by “billions of pounds”.
Many expect the speech’s focus on the “funding black hole” will to pave the way to a Budget characterised by tax rises and spending cuts, including a much touted capital gains tax hike, which yesterday the Treasury turned down the opportunity to deny.
In her speech, Reeves will add: “Taxes [are] at a seventy year high. Debt through the roof. An economy only just coming out of recession. I knew all those things. I was honest about them during the election campaign. And the difficult choices it meant.
“But upon my arrival at the Treasury three weeks ago, it became clear that there were things I did not know. Things that the party opposite covered up from the country.”
