Rachel Reeves accused of misleading the public over the state of the country's finances

Labour tax hikes based on mistruths about the state of the country’s finances will be the “ultimate betrayal” of the British public, Jeremy Hunt warned.

Chancellor Rachel Reeves is today laying the groundwork for autumn rises presenting the findings of a review she will say shows the Tories overspent by billions.

She will tell the Commons Rishi Sunak and his ministers “covered up” what was really going on in government. But economists dismissed the claims and warned tax rises are on the way.

Ex-chancellor Jeremy Hunt accused Ms Reeves of being “beyond disingenuous”. Writing on Express.co.uk, he said: “Labour know, and have for some time, what the state of the public finances were.

“It also means that Labour made all of their many spending commitments during the campaign in full knowledge of what they could and couldn’t afford to do.

“So it is beyond disingenuous for the Chancellor to now pretend to be blind to this reality and hope the public forgets what she said.”

Mr Hunt said Labour pledged 50 times during the election campaign not to raise taxes but Capital Gains Tax, Inheritance Tax and even Pensions Relief are all in their sights.

“But doing so, based on a foundation of mistruths and misconceptions, will be the ultimate betrayal of the public, and the mandate Labour were elected on, and the British people will not forget it,” he added.

Ms Reeves will pledge to “fix the foundations of our economy” as she publishes a spending audit she is expected to say will show a £20 billion blackhole.

The Chancellor will take the axe to some infrastructure projects to save costs, with new hospitals, road and rail projects all tipped to go.

She will set the date for a departmental spending review and an autumn budget, which is where experts expect her to start hiking up taxes.

Ms Reeves will say: “Before the election, I said we would face the worst inheritance since the Second World War. Taxes at a seventy year high. Debt through the roof. An economy only just coming out of recession. I knew all those things.

“I was honest about them during the election campaign. And the difficult choices it meant. But upon my arrival at the Treasury three weeks ago, it became clear that there were things I did not know. Things that the party opposite covered up from the country.”

The Chancellor will put an end to twice a year financial statements in favour of one major budget. She will also set up a new Office of Value for Money to put an end to wasteful spending in government.

All non-essential spending on consultants will be stopped as well as unused land and buildings sold off to save cash. Ms Reeves will add: “It is time to level with the public and tell them the truth.

“The previous government refused to take the difficult decisions. They covered up the true state of the public finances. And then they ran away. I will never do that.

“The British people voted for change and we will deliver that change. I will restore economic stability. I will never stand by and let this happen again. We will fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off.”

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.

Paul Johnson, director of the Institute for Fiscal Studies, said most of the reasons for any financial blackhole were "evident" before the election and said it was “pretty likely” Labour will raise taxes in the coming months.

"It should not have come as a surprise to anybody that pay review bodies were going to suggest increases of more than 1 or 2%, he told Times Radio.

“We knew there wasn't money in the budget for anything more than that. That really was pretty clear.

“It's also the case we knew there was going to be a big bill for asylum seekers, and there was no extra money given to the Home Office to deal with that.

“So again, there's no enormous surprise there.”

He said unallocated spending for some infrastructure projects “may have been a bit less obvious” from opposition.

"So you can make a case that it's a bit harder than you expected,” Mr Johnson added. “But at the top level, the fact that public services were in a mess, there wasn't much money knocking around and this was going to be a struggle, that's not a surprise.

“A lot of this would have been evident. It frustrates me that, as we could not have said more frequently in the run up to the election, that there is a big problem. There was not enough money in the public finances to keep public services going.”