'You won't tax working people?' Labour minister in fiery clash over £20bn 'black hole'

Labour claims that the Tories left a £20 billion black hole in public finances triggered a fiery televised clash involving Steve Reed - with the environment secretary unable to explain how his government would find the cash to plug the alleged funding gap.

Chancellor Rachel Reeves is expected to unveil a black hole in the accounts of around £20 billion and blame the Conservatives for “covering up the true state of the public finances”.

She will base her remarks on a department-by-department review of public spending commissioned shortly after she took office three weeks ago.

While the excerpts released in advance included no figures, Ms Reeves will outline a £20 billion shortfall in public finances.

Speaking on GB News, Mr Reed said: "What we're going to do is break out of this Tory doom loop of a low growth economy, leading to a high tax economy, and those two things go hand in hand.

"Labour's approach will not be to have recourse to further taxation. Labour's ruling out any tax rise. Labour's approach will be to grow the economy, and we've already started making the announcements that will grow the economy.”

However, Camilla Tominey replied: "I totally understand the argument about self-sufficiency. Goodness me, we've witnessed it with our bills in recent years, we need to be more self-sufficient and not reliant on others for our energy.

"But there's there's a disconnect here because we've got Rachel Reeves talking about having inherited the worst economic legacy since the Second World War.

"We've got talk of 20 billion black holes. We've got talk of ambitious net zero energy targets to be met in six years time, which is undoubtedly going to be costly. At no point can any minister come into the studio and ever tell me how you're going to get the money to pay for this black hole to be filled? So you're saying you won't tax working people?"

Mr Reed replied: "Investment, predominantly private sector investment."

Helen Whately earlier insisted Chancellor Rachel Reeves "would have known about the state of the public finances" while serving in opposition because of the Office for Budget Responsibility.

The Chancellor is expected to unveil a black hole in the accounts of around £20 billion and blame the Conservatives for “covering up the true state of the public finances”.

She will base her remarks on a department-by-department review of public spending commissioned shortly after she took office three weeks ago.

While the excerpts released in advance included no figures, Ms Reeves will outline a £20 billion shortfall in public finances.

However, Shadow Transport Minister Ms Whately countered: "Actually while Labour is going out there and trying to tell everybody that it is all so difficult for them, this is just them setting a narrative for tax rises that they want to bring in later on.

"But actually they took over an economy that had the fastest growth in the G7, that had the deficit halved compared to when we took over in 2010, that had historic low unemployment and that had inflation back down at two percent.

"So, really good fundamentals for them to build on in Government."

John Glen, the former Shadow Paymaster General and the Tory MP for Salisbury and South Wiltshire, likewise insisted Labour’s gloomy assessment did not hold water.

Speaking to GB News, he said: “It is absolutely ridiculous. When we set up the Office of Budget Responsibility - it's all open, they mirror the Treasury's figures, every fiscal event, and there's complete transparency.

“We showed how we balanced the books…we got inflation down to two percent now, we are the fastest growing economy in the first quarter of year, we'd love to have faster growing economies across the G7 but that hasn't happened.”

There were always pressures on government departments, Mr Glen pointed out.

He added: “To govern is to take those tough decisions and to put reforms in place to reduce the number of civil servants, the welfare reforms that we set, to get those additional tens of thousands of people back into work.

“It's by taking those decisions that you manage some of those pressures. And indeed, last year when we had the review of public pay review bodies, we didn't borrow more or increase taxes, we made departments absorb those additional costs.”

Mr Glen also rejected a suggestion that former Prime Minister Rishi Sunak was poised to quit politics, with Kemi Badenoch last night throwing her hat into the ring for the leadership of the Conservative Party.

He said: “He's a man of great integrity. He will do what is required for the party. I'm sure he does feel this defeat personally and has taken responsibility for it.

“I think most people recognise the way he conducted himself demonstrates the man's great personal qualities.

“He said he'll stay for the whole of this Parliament. He's got two young children at school. I can't predict - I don't know where I will be in four or five years time. We don't know what the future holds.

“I very much hope so. He’s got a lot to contribute to national life, I worked closely with him at the Treasury and have a very high regard for him.”

Asked about who was best positioned to replace Mr Sunak, Mr Glen added: “They've all made a significant contribution in different ways.

"I think what the Conservative Party needs to do is come to terms with this historic catastrophic defeat, show a degree of humility and reflection over the summer, and allow our membership to be driving the outcome of this selection process.

"I’m not going to be drawn on who I'd be supporting yet, because I want to see all of them address many dimensions of the challenges we face both as a party but more importantly as a country.

"There are two things here. It is about who's the most credible figure to be leading us in opposition and who's going to then actually on the back of that be credible as a future candidate to be Prime Minister.

"We need a lot of scrutiny over the next three or four months. I respect all of them for having the courage to stand and I hope that we'll have a clean and helpful contest as we lay the foundations for recovery."