UK's new Treasury chief says previous government 'covered up' financial turmoil

abcnews.go.com:

Britain’s new Labour government is set to ax several transport projects in order to plug what it says is a newly found 20-billion-pound ($26 billion) shortfall in the public finances that it blames on the actions of the former Conservative administration

LONDON — Britain's new Labour government is set to ax several transport projects Monday in order to plug what it says is a newly found 20-billion-pound ($26 billion) shortfall in the public finances that it blames on the actions of the former Conservative administration.

In a major speech later, Treasury chief Rachel Reeves is set to accuse the previous government of covering up the dire state of the nation's finances after a review of departmental spending that she commissioned three weeks ago after the left-leaning Labour Party won a landslide victory to return to power for the first time in 14 years.

“It is time to level with the public and tell them the truth," Reeves will tell the House of Commons, according to the Treasury. “The previous government refused to take the difficult decisions. They covered up the true state of the public finances. And then they ran away."

Reeves is not expected to announce any changes in taxes but her comments are being interpreted as paving the way for a revenue-raising budget in the fall.

Labour pledged during the campaign that it wouldn’t raise taxes on “working people,” saying its policies would deliver faster economic growth and generate the additional revenue needed by the government. Though higher taxes on income and sales have been ruled out, Reeves could look to raise more revenue by other means, such as closing tax loopholes, particularly on capital gains or on inheritance.

However, she is expected to keep a lid on spending,