Rachel Reeves uncovers hole in public spending

Labour are safely in government and are faced with the mission of restoring the economy and delivering on their promises. Rachel Reeves, our new Chancellor has now reviewed the treasury and has now announced how the Conservative party misled them about what they would find.

Reeves addressed parliament on the topic of public finances where she reported her findings of a £22 billion hole due to overspending from the Conservatives.

Plans which were agreed despite being unfunded leading to such great overspending, which, as Reeves argues has made decisions for this parliament difficult and cuts will have to be made.

 

Where was the money spent?

Reeves addressed Parliament and states where she found overspending by the Conservatives during their time in parliament.

“If we cannot afford it, we cannot do it” – Rachel Reeves

  • Funding given to the rail companies to compensate for time during Covid totalling a £1.6 million overspend in the transport budget.
  • The cost of the asylum system including the Rwanda plan totalling an overspend of £6.4 billion this year. The Rwanda plan will be scrapped along with reducing hotel use.
  • Military assistance to Ukraine went unfunded which the Labour party will continue to support needing to scrape the funds together to avoid making the same mistakes.
  • Rishi Sunak’s proposed plan for a new advanced qualification which would replace A levels would cost £200 million next year and rise further. This was unfunded and will be scrapped by Reeves.
  • £1 billion worth of transport plans unfunded will be scrapped including road works.

 

Reeves making waves

Rachel Reeves announces that where necessary, cuts are being made to ensure public spending is kept within budget to keep overspending down and taxpayer money going where it needs to.

Her passionate speech in parliament ruffled the feathers of the party opposite with Jeremy Hunt claiming she did have access to the finance reports previously and she is making false claims.

The cut to Winter Fuel Payments will be one felt by nearly 10 million pensioners and one that Reeves claims she did not want to make but one which was necessary. Pensioners will only receive the payment if they are on lower incomes and receiving pension credit.

The plan to build 40 new hospitals by 2030 which was set by the conservatives in 2019 and has yet had little progress, most likely due to the finances needed for this project despite not being in the budget. There was a £2.8m investment for 6 hospitals to begin work. Reeves states there will be a review of this and a realistic timetable and plan will be laid out.

The next budget will be held on October 30th where the Labour party will be able to set out the plans for Autumn/Winter.