Labour’s assertion of being caught off guard by a substantial deficit in the public finances has been deemed “not credible” by the head of a prominent think tank.

Rachel Reeves is set to reveal a £19 billion gap in public finances as she gears up for an autumn tax overhaul. An initial review by Treasury officials has identified approximately £19 billion in “excess pressures” for the 2024-25 financial year alone, according to Whitehall sources.

Paul Johnson, director of the Institute for Fiscal Studies, argued that there should be no surprise regarding the poor state of the public finances. In an interview with BBC Radio 4’s Today programme, he remarked, “I don’t think it’s really very credible at all.”

He pointed out that many individuals and organizations have long highlighted the deteriorating performance of public services compared to pre-Covid levels and even compared to 2010. Johnson noted issues such as local authorities going bankrupt and NHS waiting lists growing, emphasizing that public sector pay has lagged significantly behind private sector pay in recent years.

Johnson concluded that the real issue is whether people want public services to improve, remain as they are, or deteriorate further.