Ahead of a major speech on the UK’s finances that is widely expected to provide a basis for tax hikes, Britain’s new left-wing government said the country is “bankrupt and falling apart” and blamed the previous administration for the situation.
LONDON — Britain’s new left-wing government said Sunday the country is “bankrupt and falling apart” and blamed the previous administration for the situation, ahead of a major speech on the country’s finances that is widely seen as a basis for tax hikes.
Three weeks after taking power, Starmer’s office carried out a comprehensive assessment, expressing shock at the state of affairs he inherited after 14 years of Conservative rule and publishing a departmental analysis of what it saw as the previous government’s failings.
The criticism came a day before Treasury Secretary Rachel Reeves is expected to explain the 20 billion pound ($26 billion) budget shortfall in a speech in the House of Commons.
“We will not hesitate to be honest with the public about the reality we have inherited,” Pat McFadden, a senior member of the new cabinet, said in a statement. “We will do whatever it takes to put an end to the false promises the British people have had to put up with and build Britain back together.”
Starmer’s Labour party won a landslide victory earlier this month after an election campaign in which both major parties were accused of a “conspiracy of silence” about the scale of the financial challenges facing the next government.
During the election, Labour promised not to raise taxes on “working people”, arguing that its policies would boost economic growth and generate needed extra revenue for the government, while the Conservatives have promised further tax cuts in the autumn if they are returned to power.
Starmer’s office pointed to recent comments by former Treasury Secretary Jeremy Hunt, who admitted that tax cuts this year would not have been possible if the Conservatives had returned to power, as evidence that the previous government had not been honest about the challenges facing the country.
The comments were made in an interview with the BBC, in which Mr Hunt accused Labour of exaggerating the situation to justify tax rises now that they have won the election.
“The reason we’re making all this noise about this terrible economic legacy is because Labour wants to raise taxes,” Hunt said on July 21. “If they wanted to raise taxes, all the numbers were crystal clear before the election. … They should have been honest with the British people.”
The government on Sunday released the outline of a spending review that Reeves commissioned shortly after taking office, and he is due to table the full report to Parliament on Monday.
In response to these findings, the new government accused the Conservatives of promising large amounts of funding this year “without knowing where the money would come from”.
The report claimed the military was being “hollowed out” amid growing global threats, the National Health Service was “overwhelmed” and some 7.6 million people were waiting for medical care.
Starmer’s office said the number of people crossing the Channel was still rising, despite billions of dollars being spent to house migrants and to tackle criminal gangs who force them across the Channel in dangerous rubber dinghies. 15,832 people have crossed the Channel in small boats so far this year, 9% more than the same period in 2023.
“The evaluation will show that the UK is bankrupt and dysfunctional and expose how populist politics have thrown our economy and public services into chaos,” Downing Street said in a statement.
Paul Johnson, director of the Institute for Fiscal Studies, an independent think tank specializing in British economic policy, said the predicament the government finds itself in was not surprising.
At the start of the election campaign, the institute said the UK was in a “critical fiscal position” and that the new government would have to either raise taxes, cut spending or relax the rules on public borrowing.
“It is fundamentally disingenuous for a party to come to power and then declare that things are ‘worse than expected,'” the IFS said on May 25. “The next government does not need to come to power to ‘open the books’. The books are published transparently and available for anyone to see.”
