The Chancellor’s main accusations of lack of funding and what she plans to do | Business News

Rachel Reeves accused her predecessor of hiding a “£22 billion funding gap” for the current financial year, announcing a series of “difficult decisions” to compensate.

The chancellor told MPs that the investigation she ordered into the spending plans inherited by Labor after the election found a Conservative “cover-up” that “put the party ahead of the country”.

His statement, based on the work of Treasury officials not only claimed a projected overspend of £22 billion this year but this information was withheld from the independent Office for Budget Responsibility (OBR) ahead of the March budget.

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Here, we lay out the main allegations and what Ms. Reeves plans to do about them.

The black hole”

The chancellor stated that the government reserve was spent “more than three times”.

Their central claim was that the Conservatives had too often made spending commitments under the reserve.

She said £6.4 billion of the £22 billion for the current year comes from projected spending on the asylum system alone, including the controversial Rwanda scheme.

Some action now – much more later

Reeves said the government aims to recover £5.5 billion of the £22 billion funding shortfall this year and £8 billion next year. Government departments have been asked to achieve combined savings of at least £3 billion.

She confirmed there would be a budget on October 30 to set out full measures.

Increases in income tax, social security and VAT were excluded, in line with the Labor Party’s election manifesto.

What is being cut now?

From this winter, only those receiving pension credits or other means-tested benefits will be eligible for winter fuel payments.

Former Prime Minister Rishi Sunak’s “legacy”, the Advanced British Standard qualification, will be scrapped as Ms Reeves said she “didn’t set aside a single penny to pay for it”.

Reforms to adult social care charging will not go ahead, saving more than £1 billion by the end of next year, she said.

The Restoring our Railways program will be canceled because it has not been funded.

Ms Reeves added that schemes to upgrade the A303 and A27 roads would not go ahead.

New spending commitments

Despite the funding pressures identified by the Chancellor, she confirmed that she would fully accept the recommendations of public sector paying bodies.

Hours earlier, it emerged that junior doctors in England had been offered an increase of 22.3% more than two years.