Chancellor Rachel Reeves promises to ‘fix’ the economy – as expert says ‘black hole’ matches Tory tax cuts | Politics News

Chancellor Rachel Reeves has promised to “fix” the “mess” the Conservative government has left in the economy, amid reports of a £20 billion “black hole” in the public finances.

Mrs.who is currently visiting the G20 in Brazil, told broadcasters that he intends to tell the world that the UK “is open for business” and that the new government “wants private investment in the UK economy”.

The chancellor, who will give a speech on Monday on the state of the UK’s finances, was also asked about reports of a £20 billion ‘black hole’ in the UK economy.

“I was honest during the election campaign and over the last three weeks about the scale of the legacy this government would have to receive,” she said.

“Conservatives created this mess. But let me be very clear. I will fix this.”

Meanwhile, Paul Johnson, head of the independent Institute for Fiscal Studies (IFS), told Sky News that the £20 billion difference was “almost exactly the cost of the National Security cuts that Jeremy Hunt introduced this year”.

See more information:
IMF warns UK and Hunt over NI cuts
Labor rules out increase in IR and income tax
Reeves to court Canadian pension funds

There has been speculation that Reeves could reduce spending or implement tax increases in this fall’s budget.

Mr Johnson said: “Inverting [the previous cuts] and getting back to where we were last fall on Social Security would actually solve a large part of the problem.

“Looks Work they ruled that out.

“It leaves them with a lot more difficulties, kinds of tax changes, quite technical changes to capital gains tax – which perhaps needs to happen to be fair – and inheritance tax.”

However, Johnson threw some cold water on the new government’s pronouncements that it did not know how bad the accounts were before being elected.

Click here to follow Electoral Dysfunction wherever you get your podcasts

He said: “I think at a high level, the new government was well aware that it was facing a really difficult position in terms of the scale of the problems facing public services.”

“But there may have been some details they didn’t know.

“There is no doubt that having taken command Minister of Justice and the Home Office and the Department of Education and so on, they will have seen some things they did not know, and it may well be that things are even worse than they imagined.

“But there’s no doubt they knew things would be difficult.”

Shadow Chancellor Jeremy Hunt branded Reeves’ claims about finding the economy in a worse state than expected as “nothing more than a fabrication”.

£The reality is she doesn’t want to make difficult decisions about wages, productivity or welfare reform that would mean we could live within our means and is laying the groundwork for tax rises,£ he added.