Tories covered up catastrophic finances, claims Cabinet minister Steve Reed

The Tories “covered up” the full scale of spending pressures, the Environment Secretary has claimed, as he said what Labour has found upon entering Government is “catastrophic”.

Steve Reed warned that although Labour ministers “knew the inheritance was going to be bad”, they have now “seen what’s really been going on” upon entering office.

It comes ahead of a statement by the Chancellor on Monday in which she is expected to unveil a £19 billion black hole in the public finances.

Mr Reed pointed to the crisis in the prison system, the costs of Rwanda scheme and the state of Britain’s flood defences as he claimed that the financial situation was worse than anticipated.

He told the BBC’s Sunday with Laura Kuenssberg programme: “We knew the inheritance was going to be bad and that was being flagged up through the election. But we’ve got into our offices now, we’ve seen what’s really been going on and it’s catastrophic.

“But there were things that we could not have known during the election because the Conservatives had not only not released the information, but in some cases they deliberately covered it up.”

‘Critical failure’ in prisons warning

Mr Reed said that Rishi Sunak, the former prime minister, had been warned by senior civil servants that there would be a “critical failure” in the prison system by August.

“We now know his own justice secretary was telling him to take the measures… He refused. He called the general election. He covered up that information until after the general election. 

“We could not have known until we won the election what was going on with the prisons and that’s not the only case of the Conservatives knowing a problem and hiding it.”

Mr Reed reiterated Labour’s promise that the party will not raise VAT, National Insurance or income tax, insisting that the Government “will not seek to increase taxes on working people”.

But he declined to comment further on the tax burden, saying that the Chancellor’s Budget “will tell us what’s going to happen with taxation” following the spending review period.

The Conservatives have claimed that the messaging from Government is paving the way for tax rises to be introduced in the autumn.

‘Purely a political exercise’

Jeremy Hunt, the shadow chancellor, claimed that Rachel Reeves’ audit was “purely a political exercise” designed to provide a pretext for planned increases.

The Environment Secretary also cited the Home Secretary Yvette Cooper’s, statement in the Commons about the Rwanda scheme, where she said that £700 million had been spent.

“My question to Conservative MPs on that one is, did you know and were you involved in this cover up? Or did you not know?

“In which case, they should be grateful that Rachel Reeves is now exposing the true extent of this catastrophic inheritance from the previous Conservative government.”

Paul Johnson, of the Institute for Fiscal Studies, said that the Government was aware of the poor financial situation. He told Sky News on Friday: “At the highest broad level, yes of course they knew broadly speaking how bad things were.

“I’ve no doubt they’ve discovered some specific issues and particularly about how tough things are this year or immediately, which wouldn’t have been quite so evident from the public pronouncements. So my guess is that that’s what they’re going to focus on on Monday.”

Alicia Kearns, the Shadow Minister for Foreign Affairs, accused Mr Reed of a “cynical rewriting of the past”.

She told the BBC: “It is frankly, nonsense to say they don’t know how the sums add up. They’ve had the OBR (Office for Budget Responsibility) , they’ve had the detail.”

She added: “We also were very clear there are difficult spending decisions to be made. Labour lied and said ‘we’re not going to put tax on working people’. They wouldn’t define what that was.”