Rachel Reeves is expected to accuse the last government of covering up the true state of the public finances in her speech later today.

She is also going to announce the creation of an Office of Value for Money, to put an end to “wasteful” government spending.

While speculation has been mounting that Reeves is planning to hike capital gains tax in the next Budget, no such announcement is expected today.

Instead, Reeves is expected to lay bare the state of public finances, which before the election she called “the worst inheritance since the Second World War”.

She will say: “Taxes at a seventy year high. 

“Debt through the roof. 

“An economy only just coming out of recession. 

“I knew all those things. 

“I was honest about them during the election campaign. 

“And the difficult choices it meant.

“But upon my arrival at the Treasury three weeks ago, it became clear that there were things I did not know. 

“Things that the party opposite covered up from the country.

“It is time to level with the public and tell them the truth.

“The previous government refused to take the difficult decisions. They covered up the true state of the public finances. And then they ran away. I will never do that.

“The British people voted for change and we will deliver that change. I will restore economic stability. I will never stand by and let this happen again.

“We will fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off.”