5 occasions Tories wrecked the financial system as Kemi Badenoch assault on Rachel Reeves backfires

Kemi Badenoch attempted to put Labour on the back foot on the economy – only to have her party’s dire 14-year record in power thrown back at her.

The Tory leader brazenly claimed Rachel Reeves is not up to the job of Chancellor during a tense PMQs session. But Keir Starmer gave a robust defence of Ms Reeves, who is grappling with turbulence in the markets, saying she will be in post “for many years to come”.

Faced with an attack on rising borrowing costs the PM said: “If we all thought that politics was about cheap words, I could criticise their Chancellors, but I don’t have enough time to go through all the Chancellors that they had.

“We had one Budget, that’s what we’re committed to, strong fiscal rules, that’s what we’ll stick to, unlike the party opposite.” Ms Badenoch suggested there might need to be an emergency budget – something dismissed by the Chief Secretary to the Treasury Darren Jones.

It comes as Ms Reeves attempts to deal with the chaos the Tories left behind – with the highest level of debt since the 1960s and the highest tax burden in 70 years. On top of that, she says a £22billion black hole in public finances was covered up before the general election.

Here The Mirror looks at some of the economic turmoil left behind by the Tories’ 14 years in power.

£22billion black hole

It’s no secret that public finances were not in a great place when Labour took over. But Rachel Reeves said she was horrified by what she discovered when she arrived in the Treasury.

In a speech on July 29, less than three weeks after the General Election, the Chancellor accused the Tories of covering up how bad things were.

The opposition disputes the figures, but Ms Reeves fumed: “The previous Government published their plans for day-to-day spending in the spring Budget in March, but when I arrived at the Treasury, I was alerted by officials on the very first day that that was not how much the Government had expected to spend this year. It was not even close; in fact, the total pressure on those budgets across a range of areas was an additional £35 billion.”

“Once we account for the slippage in budgets that we usually see over a year and the reserve of £9 billion designed to respond to genuinely unexpected events, that means that we have inherited a projected overspend of £22 billion.

“That is a £22 billion hole in the public finances now—not in the future, but now. It is £22 billion of spending this year that was covered up by the Conservative party.”

Liz Truss’s 49-day disaster

Liz Truss’s 49-days in office and her disastrous mini-Budget caused a market meltdown and was a major factor in the Tories being turfed out of No10 last year.

The country’s shortest-serving PM was forced to sack her Chancellor Kwasi Kwarteng and replace him with Jeremy Hunt, who then ripped up her economic plans. Several days later she announced her resignation after losing the confidence of the markets, her own MPs and the public.

Just last week the ex-PM – who also lost her seat at the last General Election – urged Keir Starmer to stop making what she claimed were “false and defamatory” claims that she crashed the economy during her chaotic spell in No10. But the PM’s spokesman suggested Mr Starmer would ignore the pleas.

They said: “From what I can gather, I don’t think the prime minister is the only person in the country who shares the view in relation to the previous government’s handling of the economy. I guess the question is whether she will be writing to millions of people up and down the country as well, who felt her economic record which pushed their mortgage bills up.”

Broken Brexit promises

Remember the promises of Brexit?

Boris Johnson claimed leaving the EU would do wonders for our economy. Notably the Vote Leave campaign said the UK would benefit from a whopping £350million, which could be spent on the NHS instead of being sent to Brussels.

In ‘ the benefits of Brexit’ white paper, published in January 2022 by the Cabinet Office, the former Prime Minister hailed “the start of a whole new chapter for our country, our economy and our people”. The 105-page document claimed Brexit would bring “new opportunities to drive forward our economy” and that the UK would become “the best regulated advanced economy in the world“.

But the official Treasury watchdog’s analysis of Brexit makes for grim reading on how the Tories’ Brexit has actually impacted our economy. In a post last May, the Office for Budget Responsibility (OBR) warns that both exports and imports will be around 15% in the long run than if the UK had remained in the EU.

And it said that the post-Brexit trading relationship between the UK and EU will reduce long-run productivity by 4% compared to if Brexit hadn’t happened.

Austerity legacy

After taking office in 2010 David Cameron and his then Chancellor George Osborne ushered in a new era of savage austerity. Billions of pounds was slashed from the welfare safety net while public sector pay was squeezed – eroding the real-terms pay of millions of Brits.

Public services and local councils were left reeling, resulting in the grim scenes of crumbling schools forced to delay the return of classrooms in the summer of 2023. The Tories’ austerity-slashing programme was also blamed for leaving the country brutally exposed to the Covid pandemic in 2020.

The new government has said child poverty surged by 700,000 since 2010 with over four million kids now growing up a in low-income family.

And expert analysis last year showed that living standards in the last Parliament – between 2019 and 2024 – fell by 0.6%. The Resolution Foundation think-tank highlighted it was the first drop since the 1950-51 Parliament.

Covid fraud scandal

Billions of pounds has been lost in Covid fraud after the Tories handed out public money to friends and donors.

The corruption scandal rocked the UK amid Tory cronies financially benefiting from the devastating pandemic. A fifth of Covid contracts awarded by the Tory government had signs of possible corruption, a report by Transparency International UK found.

In 2022, the then-Tory government’s use of the “VIP lane” to award two PPE contracts was found to be unlawful. Meanwhile a National Crime Agency investigation is ongoing into PPE Medpro, the company led by the husband of former suspended Tory peer Michelle Mone.

Chancellor Rachel Reeves has already appointed a Covid Corruption Commissioner to target “rip-off artists and fraudsters”. She will order investigations into more than £600million worth of Covid contracts awarded by the Tory government. “I do not tolerate waste. I will treat taxpayers’ money with respect,” she has said.