Rachel Reeves accused Jeremy Hunt on Monday of lying about the condition of the public finances. This escalated a dispute with the Conservatives, who claimed that they had left a £22bn deficit.
The chancellor said that her predecessor had “knowingly and intentionally… lied” about public spending to the MPs and country.
“Jeremy Hunt hid the truth about the state of public finances from the House of Commons, and the whole country.” She told Sky News that “he did it knowingly and intentionally.” “He lied and they lied about the state the public finances during the election campaign.”
Hunt rejected these claims, and wrote on Monday to Simon Case, cabinet secretary and chief of the UK civil service, disputing Labour’s assessment.
In his letter, he demanded “an immediate answer” to the “conflicting allegations” that risked “bringing the Civil Service into disrepute”. He said either the spending plans of the estimates approved by senior civil servants are incorrect or the document Reeves presented to the Commons Monday is incorrect.
Citing an hole of £22bn in the public finances, Reeves scrapped on Monday a number of Conservative policies, including a long anticipated cap on social care, plans to construct 40 hospitals, and various road project.
She also reduced winter fuel payments for 10 million pensioners who are wealthier, reversing the policy that Gordon Brown had introduced. This will save £1.5bn over the next financial period.
As a result, the number of pensioners who receive the winter fuel allowance will drop from 11.4 to 1.5 million. The decision to test the household’s means to determine if they are eligible for the benefit of up to £300 is a measure that has been taken to ensure that households with at least one person over 80 years old can qualify.
The Conservatives noted that when Labour was in opposition, Darren Jones (the current chief secretary of the Treasury) wrote to Hunt asking if he planned to eliminate winter fuel allowances for certain pensioners.
In a letter dated November, Jones stated that pensioners will be “deeply worried” and “anxious” if their incomes are threatened by this government.
Reeves’ decision to fully fund public sector pay above inflation was credited for nearly half of the shortfall, or £9.4bn.
When asked how much it would be to settle junior doctors pay, the chancellor said Times Radio that “£350m is a small drop in the bucket… Last year industrial action cost our economy £1.7bn.” The industrial action caused a lot of misery and pain for those who were waiting for appointments which never came.
She said that junior doctors in the public sector, including those who work for the government, were receiving pay increases on par with private sector workers and deserved it.
Reeves defended her decision not to implement the planned cap for social care costs by saying that she was forced to take “incredibly hard decisions”.
She told BBC Radio 4: “What I inherited… was a gap of £22bn between what the government had said it would spend and what they actually spent. I am now in a position to take urgent decisions to restore financial and economic stability.” “I was determined that we would get a handle on these pressures.”
“When I conducted the audit of public expenditure and public finances with Treasury officials, we discovered that certain promises made by the previous government did not have funding attached. Social care was among them. Another was the introduction of new hospital programmes. Another was the spending on transport. Another was the replacement of A levels. “Asylum was another.”
Reeves stated, “I had to take a lot of difficult decisions yesterday. Decisions that I did not want to make and decisions that i never expected to have to make.” There are many things that the new Labour government would love to do. You can’t accomplish them unless you know where the money will come from.
She said Wes Streeting will take forward plans for working with the sector on reforming social care.
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