Chancellor Rachel Reeves is making a statement on the economy (Image: Getty)
Tories blasted Rachel Reeves for “absolutely ridiculous” claims that the public finances are worse than expected.
The Chancellor will make an hour long statement on Monday trashing the Tories and laying the groundwork for tax hikes in the autumn.
Shadow Treasury minister John Glen said Labour’s claims were not credible.
He told GB News: “It’s absolutely ridiculous. When we set up the Office for Budget Responsibility, it’s all open, they mirror the Treasury’s figures every single fiscal event.
“There’s complete transparency.”
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Mr Glen said the Tories “made difficult decisions” to balance the books by trying to reduce the welfare bill and cut the number of civil servants.
He said there are always pressures and every department always wants more money at Budget time.
“To govern is to take those decisions,” he added.
Ms Reeves is expected to rip up rail and road plans to save money to meet the shortfall she claims the Conservatives left.
The Lower Thames Crossing, a proposed road project which would connect the M25 in Essex with the M2 and A2 in Kent via a new tunnel under the Thames estuary, is among the schemes facing the axe.
New hospital projects are also likely to be dropped or downgraded.
But the Chancellor is also expected to approve above-inflation pay rises for millions of public sector workers in response to the recommendations of independent pay review bodies.
Teachers and some 1.3 million NHS staff could be in line for a 5.5% pay boost, which could cost about ￡3.5 billion more than had been budgeted for.
Economists believe this could rise to about ￡10 billion if other pay review bodies give similar advice on workforces such as police and prisons officers and doctors and dentists.
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A review ordered by Ms Reeves suggests there is a ￡20 billion annual gap between revenues and funding commitments.
Any tax hikes are likely to come in the autumn budget. Ms Reeves will set the date on Monday.
Labour has ruled out lifting income tax, VAT, national insurance and corporation tax, potentially leaving changes to pensions relief and capital gains and inheritance levies on the table.
Environment Secretary Steve Reed said the inheritance from the previous government was “catastrophic” and accused Rishi Sunak of covering up the problems.
Mr Reed was asked if Labour’s shock about discovering the state of public finances after coming to power was “theatre”.
He told Sunday Morning with Trevor Phillips: “It’s not only that we didn’t know, the prime minister deliberately covered it up.”
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Mr Reed would not confirm that Labour has kept changes to pensions relief and capital gains and inheritance levies on the table to potentially raise funds and plug the gap.
He refused to say if the tax burden will fall under a Labour government.