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The government’s “black hole” could be bigger than the £22bn it has claimed as cabinet ministers are being pressured to scrap projects immediately to fill it, Sky News understands.
After Labour won the election in July, Chancellor Rachel Reeves accused the previous government of leaving a £22bn shortfall in public finances they had not disclosed.
She promptly cancelled several projects, including 40 new hospitals, reforms to adult social care charges, a new Advanced British Standard qualification, and several road and train projects – and reduced the number of pensioners who will get the winter fuel allowance.
But speaking on the Politics with Jack and Sam podcast today, Sky News’ deputy political editor Sam Coates said: “One of the things I’m told is that the overall black hole could be bigger than £22bn, because don’t forget, £20bn is just the gap in this financial year alone.”
He said the government has not yet had the numbers from the Office for Budget Responsibility (OBR) but has had a rough forecast for the coming years.
“So they could have to fill an even bigger sum, these are massive amounts of money,” he added.
But because the black hole is for this year alone, it has to be filled quickly which poses the question of how to do that.
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Which taxes could Labour increase?
“I’m told that to fill an immediate in-year black hole, you can’t really use tax at all because it takes too long to set it up,” Sam said.
“So there will be tax rises. But they can’t really use that to solve this problem. And welfare decisions are the same really.
“You have to look to Whitehall spending,…
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