Rachel Reeves will signal Labour’s plans to cut government departments and the Civil Service as the new administration looks to accuse Rishi Sunak of “covering up” problems with the economy.
The chancellor is set to speak to the House of Commons on Monday following a review of the government finances after taking office at the start of the month.
It has been reported that Ms Reeves will reveal a £20bn “black hole” she has found in the books – although the Conservative Party argues she would have been aware of this before taking office.
Follow a Sky News special programme on Ms Reeves’ speech from 3pm on Monday on Sky channel 501, Virgin channel 602, Freeview channel 233, on the Sky News website and app or on YouTube.
Ms Reeves will reveal the date of this year’s budget, with speculation Labour are considering raising taxes in that fiscal event.
Her speech will take place at some point after 3pm, depending on what other business is happening in the House of Commons.
Monday’s announcement will, however, set out plans for public sector cuts in a bid to save money for the current financial year.
According to the Treasury, Ms Reeves “will announce immediate action to restore economic stability and deliver departmental savings this financial year”.
Ms Reeves is expected to say: “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 will announce an Office of Value for Money (OVM) – paid for from existing Civil Service budgets – to “put an end to wasteful spending”.
The OVM will make recommendations for how to save money for the public purse this year.
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New reforms will be announced to drive “efficiencies” – a word which usually means cuts – across government departments and arm’s lengths bodies like the Prison and Probation Service, Met Office, Environment Agency and HM Revenue and Customs.
There will also be “immediate action” to stop “non-essential spending” on consultants, as well as the selling off of “surplus estates” and rushing through previously announced efficiencies.
Ms Reeves is also set to say: “Before the election, I said we would face the worst inheritance since the Second World War.
“Taxes at a 70-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.”
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The chancellor also plans to return the UK to having one fiscal event per year in a bid to return stability to markets.
And she is set to recommit to the government’s fiscal rules – including not borrowing to fund day-to-day spending, and getting debt falling by the fifth year of the economic forecast.
Shadow exchequer secretary to the Treasury Gareth Davies said: “Rachel Reeves is trying to con the British public into accepting Labour’s tax rises.
“She wants to pretend that the OBR, established by the Conservatives and whose forecasting was used in all of the last Conservative governments budgets, doesn’t exist in order to make any of what she says believable and just like her books, this announcement is a copy and paste of what has come decades before.
“But her words and actions on supposedly saving the taxpayer money are an insult when she is secretly planning to raise their taxes at the same time.”