Rachel Reeves has accused her predecessor as chancellor of “lying” about the state of the public finances, having revealed a £22 billion economic “black hole” in a statement on Monday.
The chancellor suggested Jeremy Hunt “lied” repeatedly during the election campaign about the “true state of the public finances.”
The comments come after the chancellor announced a series of measures to make £5.5 billion in savings this year. Reeves also warned of more difficult decisions to come, with tax rises at an autumn budget on 30 October now widely expected.
Speaking in the House of Commons on Monday, Reeves said a review of the government’s spending plans found a “cover-up” that “put party ahead of country”.
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She claimed the Conservatives “ducked difficult decisions” knowing the money was not available.
She also alleged that information was withheld from the independent Office for Budget Responsibility (OBR) ahead of the spring budget in March.
Responding on Monday, Jeremy Hunt called the “£22 billion black hole” claim “fictitious”.
Rachel Reeves confronts ‘unforgivable’ inheritance with plan to plug ‘£22bn black hole’
Asked about her accusation that the previous government “covered up” the fiscal black hole and whether she is labelling her predecessor as chancellor a “liar”, Reeves told Sky News: “Jeremy Hunt covered up from the House of Commons and from the country the true state of the public finances.
“He did that knowingly and deliberately. He lied, and they lied during the election campaign about the state of the public finances.”
The chancellor added that the Conservatives were proposing tax cuts during the election “all the while knowing there was already a £22 billion black hole in the public finances.”
“It is beyond reckless and irresponsible, and at a time when trust in politics is already at an all-time low… to then mislead people in that way during a general election about what was possible — it was unforgivable.”
The chancellor also defended her decision to accept the independent pay review bodies’ recommendations for public sector pay rises in full. Had she not done so, it has been noted, the black hole would have been more like £11 billion.
Reeves said: “Even it was a £10 billion or £11 billion black hole, it’s still unforgivable.”
The chancellor also said that the cost of NHS industrial action last year was £1.7 billion, so “the cost of doing nothing” is “not zero either”.
She added: “The alternative is a situation where we continue to struggle to recruit and retain soldiers and officers in our armed forces, where we continue to struggle to recruit doctors and nurses in our NHS, and where we struggle to retain public sector workers. And that has a cost as well.”
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