Labour MPs claim Spring Budget about 'burning house down' as Scotland's Ian Murray says tax cuts 'well in excess of Liz Truss chaos'

MPs believe the next UK government face a daunting task to sort out the nation’s finances

Labour MPs have claimed the Spring Budget was about “burning the house down” as shadow Scotland secretary Ian Murray condemned the tax cuts as “well in excess of Truss chaos”.

The Scotsman spoke to numerous Labour figures, who accused the Conservatives of “living in a fantasy land”, and deliberately delaying expensive pay-outs for an incoming Labour government.

Chancellor Jeremy Hunt delivered his Budget this week, where he cut 2p off National Insurance, but failed to unveil details on public spending. In the immediate aftermath, the Institute for Fiscal Studies (IFS) suggested some public services were now facing cuts of £20 billion a year by 2028.

Labour claimed Jeremy Hunt was "living in a fantasy land" after the Spring Budget.

Mr Murray, the MP for Edinburgh South, claimed the Tories had “maxed out” the nation’s credit card, and left Labour, if they win, with the worst economic inheritance in peacetime history.

He said: “Jeremy Hunt’s Budget showed a government totally out of ideas, and soon to be out of time. As is often the case now, where Labour leads, the government follows – from abolishing non-doms to extending the windfall tax on oil and gas giants, two policies they’ve railed against for years.

“They’ve taken the roof and doors off the house, taken out the windows and are now burning it down before the election. But this Chancellor and this government are beyond saving. It is time for a general election to put us all out of the Tory economic misery with a Labour government.

“The government has been maxing out the country’s credit card for years, which has left the situation where the next incoming government will be left with the worst economic inheritance in peacetime.

“It’s all driven by their decisions in government that have created a low growth, high tax, low productivity doom-loop economy. They are now promising another unfunded tax cut that’s well in excess of the [Liz] Truss Budget”

His criticisms were echoed by fellow Scottish Labour MP Michael Shanks, who admitted it would be “tough” with Labour forced to make “difficult decisions” if they win the election, expected this year.

The Rutherglen and Hamilton West MP said: “I think the fundamental thing in the Budget was the government deliberately put off any spending review. Either they are accepting they are not going to be in government and don’t want to think beyond this year, or they don’t have a plan for what public spending will be. It’s an incredibly difficult inheritance, and I suspect we don’t know how bad it actually is until we’re in government.

“I think there are two elements. Firstly, it’s sheer incompetence, I don't think that’s planned, I just think they are incompetent when it comes to economic issues.

“Then there’s putting off things. Nothing put aside for infected blood victims, nothing put aside for the Horizon victims. They have known that was coming for a long time, and they have put it off, I think deliberately, so it's someone else's problem”.

Asked how Labour could cope, confronted with either having to bring in tax rises or budget cuts, Mr Shanks insisted there was another option.

He said: “The third thing is you can grow the tax base. We can grow the amount of tax we take in more generally by widening that base. If you grow the economy, you grow the tax base and don’t need to raise taxes. When the economy grows, so does the tax base.

“The doom loop is absolutely a thing. Growth continues to flatline. We can’t keep going around in this loop.

“I’m not worried. It’s going to be tough, and we have been really honest that there are going to be difficult decisions. We have been very clear that the spending rules will be sacrosanct. That’s about being honest with the public, at a time when politicians haven’t generally been honest.”

Other Labour MPs told The Scotsman they were reassured by the reaction of business, saying many key figures had already reached out to the party offering to work together. This includes not just members of the shadow cabinet, but also backbenchers, who are being inundated with requests for meetings.

A recurring theme within the party is “growth”, with Labour figures insistent that good management of the economy could allow them to spend more than expected.

One MP said: “I think we've been fairly clear about what we'll be standing to inherit, which I'm glad we're being honest about both in terms of driving the point home on how bad the Tories have f****d things, but also for expectation management about what we'll be able to do and how quickly.

“It makes the growth stuff we're talking about all the more vital, particularly in terms of the industrial strategy piece, because that's then the foundation for hopefully being able to turn the taps on more.”

The MP, who is on the left of the party, also questioned how much of the Spring Budget could actually come into force.

They said: “It's all just fantasy-land stuff as most of these measures are a long time into the future, and by that point they won't be here to do it, God willing.

“It's just red meat for their backbenchers with no regard for the country they're meant to serve.”

Economists had offered a mixed review of the Spring Budget, with the IFS saying both main parties were engaged in a “conspiracy of silence” over their plans for public spending.

The Institute of Chartered Accountants of Scotland called for “more debate” on how to reform the public finances.

Bruce Cartwright, ICAS chief executive, said: “Public services and their finances are under huge pressure. We need more debate about how to achieve sustainable public finances and the opportunities for service improvement and reform.

“Longer-term financial planning is not just good practice, it better matches the longer-term horizons of public service needs. We believe that managing the public finances on a longer horizon is a crucial tool for meeting public sector challenges.”