Britain’s Labour Government Says It Inherited a $28 Billion Budget Hole

Britain’s Labour government said it was making “difficult decisions” concerning the budget, including cutting some road and rail projects and pension benefits, after accusing its predecessor, the Conservative Party, of leaving the country’s finances in a mess.

Rachel Reeves, the chancellor of the Exchequer, said on Monday that there was a hole of 22 billion pounds (about $28 billion) in the country’s coffers this year because spending needs had exceeded expected revenue. To begin plugging the gap, she announced a series of measures to cut about £5.5 billion this year and another £8 billion next year, including reducing spending on consultants and a previously announced decision to end a program to deport asylum seekers to Rwanda.

Ms. Reeves accused the Conservative Party of making spending commitments on plans such as road repairs and building new hospitals “knowing the money wasn’t there.” Some of those plans would scrapped or reviewed.

“The scale of this overspend is not sustainable,” Ms. Reeves told lawmakers in Parliament. She will present a full budget to lawmakers at the end of October.

But a substantial part of the spending gap comes from the Labour government’s plans to increase public sector pay. Ms. Reeves said she had accepted recommendations from independent review bodies to increase public sector wages about 6 percent this year, adding £9 billion to the budget. She said government departments would need to find up to £3 billion worth of savings to help pay for this.

In addition, junior doctors in England on Monday were offered a 22 percent raise over two years in an effort to end strikes. The decision is a break from the Conservative government, which resisted pay increases that were higher than the rate of inflation, arguing that such a move would risk pushing up the country’s price pressures.