New UK government says country ‘devastated and broken’ in tackling public deficit

Britain’s new left-wing government said on Sunday the country was “devastated and broken”, blaming previous governments ahead of a major speech on the state of the public finances that is expected to pave the way for tax rises.

In a global analysis three weeks after taking office, Prime Minister Keir Starmer’s office expressed dismay at the state of affairs after 14 years of Conservative government, publishing a management study into the failures it sees as having been committed by the previous government.

The criticism came a day before Chancellor of the Exchequer Rachel Reeves was due to detail a £20 billion ($26 billion) public deficit in a speech to the House of Commons.

“We will not be afraid to be honest with the public about the truth of what we have inherited,” Pat McFadden, a senior member of the new government, said in a statement. “We have put an end to the broken promises that the British people have had to endure, and we will do whatever it takes to fix the UK.”

Starmer’s Labour Party won this month’s election by a landslide after a campaign in which critics accused both parties of maintaining a “conspiracy of silence” about the scale of the financial challenges facing the next chief executive.

Labour promised during the election campaign that it would not raise taxes on “workers” and claimed that its policies would deliver faster economic growth and generate much-needed additional revenue for the government. For their part, the Conservatives have promised further tax cuts in the autumn if they remain in power.

As evidence that the previous government was not forthright about the challenges facing the country, Starmer’s office cited recent comments by former Chancellor of the Exchequer Jeremy Hunt in which he said he would not have been able to cut taxes this year if the Conservatives had been re-elected.

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The comments came in an interview with the BBC in which Hunt also accused the Labour Party of exaggerating the situation to justify tax increases after winning the election.

“The reason for all this talk about this terrible economic legacy is that Labour wants to raise taxes,” Hunt said on July 21. “If they wanted to raise taxes, all the figures were crystal clear before the election… They should have been honest with the British people.”

The government on Sunday released an overview of the spending review ordered by Reeves shortly after taking office. The minister will present the full report to parliament on Monday.

The findings prompted the new government to accuse the Conservatives of making big funding promises for this financial year “without knowing where the money will come from”.

He noted that the military was being “emptied” at a time of increasing global threats, while the National Health Service was “crippled” and around 7.6 million people were waiting for treatment.

Starmer said that despite billions spent on housing migrants and tackling criminal gangs that transport migrants across the English Channel in dangerous inflatable boats, the number of people making the crossing continues to grow. Some 15,832 people have crossed the Channel in small boats this year, up 9% on the same period in 2023.

“The analysis will show that Britain is broke and broken, underscoring the catastrophe that populist policies have created for the economy and public services,” the prime minister’s office said in a statement.

Paul Johnson, director of the Institute for Fiscal Studies, an independent think tank that focuses on British economic policy, said the situation the government finds itself in is not surprising.

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When the election campaign began, the institute said the UK was in a “dangerous fiscal position” and that the next government would have to raise taxes, either cut spending or relax public borrowing rules.

“If a party comes to power and then declares that things are ‘worse than expected’, that would be a gross disingenuousness,” the union said on May 25. “The next government does not need to be in office in order to ‘open the accounts’. These accounts are published transparently and are available for all to consult.”

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