On Saturday, independent think tank The Institute of Fiscal Studies issued a stark warning about the challenges awaiting the next government, saying the state of public finances hung over the election campaign “like a dark cloud”.

It warned that more tax rises or cuts to public services could lie ahead, whoever won on 4 July.

Ms Reeves promised there was “not going to be a return to austerity”, saying commitments to boost frontline services were a “down payment on the changes that we want to make”.

“That money for our NHS, the additional police – 13,000 additional police and community officers – and the 6,500 additional teachers in our schools, they are all fully costed and fully funded promises because unless things are fully costed and fully funded, frankly, you can’t believe they’re going to happen.”

She said Labour would raise the money by ending the VAT exemption for private schools and by extending the windfall tax on energy firms.

“But in the end we have to grow the economy, we have to turn around this dire economic performance,” she added.

Ms Reeves ruled out setting a timetable for when a Labour government would increase defence spending to 2.5% of national income, saying there would be a review of defence costs which had “got out of control under this government”.

Rishi Sunak has pledged that the defence budget will rise to the 2.5% figure by 2030.

A spending review would take place if Labour won the election, the shadow chancellor said, and a “fiscal lock” would be introduced, meaning any significant and permanent tax and spending changes would require a full accompanying forecast from the independent Office for Budget Responsibility (OBR).

The OBR normally needs 10 weeks’ notice to produce a forecast, and scrutiny of opposition party plans is not allowed.

This means there would need to be a delay between the result of the general election and any spending actions, in order for the OBR to comprehensively incorporate and evaluate those policies if Labour was to follow through on its commitment for a full process.



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