Reeves warns of ‘difficult decisions’ as she outlines plan to reverse £140bn Tory black hole

Britain’s new history making chancellor Rachel Reeves will warn that she must “make difficult decisions” to “fix the foundations of the economy” as she gives her first speech as chancellor today.

The UK’s first female chancellor in 803 years of the office existing, is set to deliver a speech to business leaders from some of Britain’s most pioneering industries – including its financial services and green industries – in central London.

They are due to hear Ms Reeves vow to “fix the foundations of our economy so we can rebuild Britain and make every part of our country better off” and claim that Tory decisions meant the economy failed to grow by £10 billion for each of their 14 years in charge.

The new chancellor wants to “waste no time” and start off on the front foot as she pushes ahead with what she believes will be a high growth agenda for the UK economy.

But already, she is facing demands from Britain’s leading union, Unite, to borrow much more to invest in British industry.

Added to that her warning about “difficult decisions” will come less than two days after new prime minister Sir Keir Starmer failed to rule out more tax increases in his first Downing Street press conference over the weekend.

Observers will be watching to see if there will be movement on increasing levies like fuel duty, capital gains tax or council tax banding which Labour refused to rule out during the election campaign.

The Tories controversially claimed that Labour’s plans would result in a tax hike of £2,000 per household although this figure was disowned by the most senior civil servant in the Treasury.

Ms Reeves is due to say: “Last week, the British people voted for change. And over the past 72 hours I have begun the work necessary to deliver on that mandate.

“Our manifesto was clear: ‘Sustained economic growth is the only route to improving the prosperity of our country and the living standards of working people.’

“Where governments have been unwilling to take the difficult decisions to deliver growth – or have waited too long to act – I will deliver.

“It is now a national mission. There is no time to waste.

“This morning I want to outline the first steps this new government has taken to fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off.”

Ms Reeves will try to pin the blame of economic failure on the last 14 years of Conservative led governments as she sets out her plans. She will claim that “lost opportunities” have meant the UK economy is £140 billion smaller than it should be.

She is expected to say: “We face the legacy of fourteen years of chaos and economic irresponsibility.

“New Treasury analysis I requested over the weekend exposed the opportunities lost from this failure.

“Had the UK economy grown at the average rate of OECD economies since 2010, it would have been over £140 billion larger.

“This could have brought in an additional £58 billion in tax revenues last year alone to sustain our public services.

“It falls to this new Government to fix the foundations.”