In the past 10 years, the tax take - which is the total amount of money a government collects - has been on the rise as a percentage of the UK's GDP (which means the overall size of the economy).

In the last ten years, it has gone up from under 34% to 36%. In the next five years, that measure is expected to reach a 70-year high.

Labour has pledged not to raise National Insurance, income tax or VAT so will need to find ways to fund its spending plans without pulling on those big levers which governments often rely on.

Image source, PA Media

The SNP is calling for a "cast iron commitment" from Rachel Reeves that public services will not be cut.

Commenting ahead of her statement, SNP Westminster leader Stephen Flynn MP said the Labour chancellor must not "pull a George Osborne and starve our public services of much-needed cash".

He accused Labour of "paving the way" to announce deeper cuts to government departments.

Dearbail Jordan
Business reporter

Part of Rachel Reeves' plan to find billions of pounds is expected to involve axing work handed to consultancy firms.

Since December 2019, when the Conservatives under Prime Minister Boris Johnson won the general election, the government awarded public sector contracts worth £7.1bn to eight companies, according to data group Tussell, including the likes of KPMG, Deloitte and PwC.

Both Labour and the Tories promised in their 2024 election manifestos to cut their reliance on consultants.

Let's see what the new chancellor promises this afternoon.

As we've been reporting, junior doctors are set to be offered on average a 22% pay rise across two years.

It could make good a Labour election pledge to quickly end the long-running NHS dispute, which has seen junior doctors in England take industrial action 11 times since March 2023.

The offer comprises a 4% backdated pay rise for 2023-24, as well as the existing increase worth 9% on average for the last financial year. This is alongside an additional 6% offer for 2024-25 and a £1,000 consolidated payment.

Junior doctors had been campaigning for a 35% pay increase. Below you can see the current pay package for each point of the pay scale and you can read more here.

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The window for nominations in the Conservative Party leadership election has now closed and we now know who the six people vying to be leader of the opposition are.

• Shadow housing secretary Kemi Badenoch's leadership pitch has focused on a "renewal" of conservative values
• Former Home Secretary Dame Priti Patel is pledging to give back power to the party members and putting "unity before personal vendetta"
• Former immigration minister Robert Jenrick is expected to campaign on cutting immigration and pulling out of the European Convention on Human Rights
• Shadow security minister Tom Tugendhat says he wants to "rebuild trust to rebuild the party" and make sure it is "able to deliver"
• Shadow home secretary James Cleverly, the first to announce his bid, has blamed party infighting for the party's election loss and wants the Tories to expand their supporter base
• Shadow work and pensions secretary Mel Stride says the party needs unity to become an effective opposition

Katy Austin
Transport correspondent

A plan to build a road tunnel under the site of Stonehenge has become a long-running saga and prompted warnings from Unesco it could be added to its world heritage danger list, external.

The official price tag to overhaul eight miles of the A303 in Wiltshire is £1.7bn but campaigners argue that’s an old estimate and the cost would be closer to £2.5bn now. So far, around £160m has been spent on the scheme.

The project would entail building a two-mile tunnel under Stonehenge which National Highways said would cut journey times and get rid of the sight and noise of traffic.

Others have said it would cause “permanent, irreversible harm” to the area and potentially damage undiscovered artefacts below the ground.

The Tory-run Department for Transport gave the road the greenlight but it has faced numerous legal challenges.

Could Reeves be about to the Stonehenge tunnel sage once and for all to save money?

Image source, Pool

We've been keeping an eye on comings and goings at Downing St ahead of the Chancellor's address to the Commons this afternoon.

The Energy Secretary Ed Miliband and the Justice Secretary Shabana Mahmood have both been spotted leaving in the last few minutes.

Image source, EPA

Pat McFadden, a senior minister in the Cabinet Office, says the Conservative’s Rwanda asylum scheme and the teachers’ pay deal are examples of policies that actually cost more than was publicly disclosed by the last government.

He told Sky News this morning: "We were told, for example, that the Rwanda scheme was going to cost £400 million. We have now found that it is £700 million, with billions more to be spent in future.

"In addition to that, the secretary of state for education had a pay offer for teachers on her desk that nobody told anyone about during the election."

He said the sum total of these commitments create "significant pressures on the budget".

McFadden also told Times Radio Labour's election promise not to raise income tax, national insurance or VAT would "still hold" and there would be no tax announcements today.

The UK's national debt is about £2.7 trillion - equal to 99.5% of the UK economy - according to recent figures released by the Office for National Statistics, external.

The government generally spends more money than it raises through taxes and to make up the difference it borrows money. That money has to be paid back with interest.

UK national debt is now at its highest level since 1962, even higher than during the pandemic - but this figure is still lower than some other big economies like France, Japan and the US.

Economists are divided on the impact of national debt: some say the government spends too much on interest, while others say borrowing helps grow the economy to generate more tax.

You can read more about debt and borrowing here.

Image source, Getty Images

We're expecting Chancellor Rachel Reeves to announce cuts to some big spending projects this afternoon. Here’s what could be on the chopping block:

• New Hospital Programme: A Boris Johnson-era plan to build 40 new hospitals in England by 2030 at an estimated cost of £22.2bn. A review of the programme, external published in November found progress had been slow and costs were likely to be higher than promised
• Stonehenge road tunnel: A plan to build a two-mile road tunnel close to Stonehenge. Its costs so far amount to £166m in the planning stage
• Restoring Your Railway Fund: A scheme is designed to reopen previously closed rail lines, for which £500m was allocated by the previous government
• A27 Arundel bypass: A plan - estimated to cost at least £320m, external - for a bypass to take traffic on the A27 away from Arundel in West Sussex, but had been put on hold by the previous government until 2025

Contenders have until 14:30 BST today to formally put themselves forward in the race to be the next leader of the Conservative Party. Here is how the contest looks.

Who's in the running? Kemi Badenoch became the latest to join the race last night. The other contenders at time of writing are James Cleverly, Tom Tugendhat, Robert Jenrick, Priti Patel and Mel Stride. More on them all here.

Each candidate needs to be backed by at least 10 MPs to get on the ballot - a much lower bar than the last race in 2022 when they needed 100.

What happens next? From today the campaign will be in full swing and will last several months.

• During September, Tory MPs vote in a series of rounds, eventually whittling down the contenders to four.
• Tory MPs pick the final two at the party conference from 29 September until 2 October.
• All party members vote for the winner until 31 October.

When do we find out the results? The new leader will be announced on 2 November.

You can read more about the the process here.

Dearbail Jordan
Business reporter

Image source, PA Media

That is the question - and the answer depends on who you ask.

Labour claims that since winning power it has uncovered all sorts of nasties. These, they say, show that certain public services are in a worse state then the Tories let on and the new government needs to find more money to fund them.

The Tories claim this is rubbish and its spending plans were there for all to see. They accuse Labour of catastrophising so it can raise taxes in the autumn when it announces its first Budget.

An area that will account for a huge chunk of the £20bn black hole Labour claims it is facing are pay rises for NHS workers and teachers.

Independent pay review bodies have recommended a 5.5% pay rise and it looks likely Labour will honour that.

But paying that is a choice. They could choose to go for a lower amount - and risk strike action - but it would mean that its so-called black hole would be smaller.

You can read our full story here.

The director of the Institute for Fiscal Studies (IFS), a leading think thank, told the BBC on Friday he doesn’t think Labour’s claim of a previously unknown shortfall in the country’s finances is “credible”.

“I don’t think it’s really very credible at all," Johnson said, adding that the scale of the problems within the public sector was widely known and that the choice "as ever" is about how well the government of the day wants it to perform.

Labour seems confident its audit, which the new chancellor will detail this afternoon, will prove to the IFS and others that the numbers are different from what was previously publicly known.

But already back in March, the IFS had accused both Labour and the Tories of a "conspiracy of silence" over the scale of spending cuts or tax rises needed in the next parliamentary term.

Johnson had at the time said whoever won government knew they would face "eye-wateringly tough choices" on public service spending.

We've just heard about junior doctors - but Reeves is also set to announce pay rises for other public sector workers later.

Reeves has already received recommendations from eight independent panels, external each covering different groups such as teachers and prison staff. Traditionally, governments follow their advice - but they don't have to.

We don't know what the panels have suggested this year, but it's understood a rise of 5.5% has been put forward by the bodies for teachers and some NHS workers (not doctors).

Earlier this month, Reeves hinted at above-inflation pay rises for public sector workers. She was asked about the 5.5% figure and said twice that there was a cost to "not settling".

It could be pricey though - just the 5.5% rise for teachers and NHS staff could cost an extra £3bn, the Institute for Fiscal Studies previously warned.

Image source, PA Media

Junior doctors in England began strike action in March 2023, calling for a 35% pay increase over time to make up for what the British Medical Association (BMA) says were 15 years of below-inflation pay rises.

Last month, they began their 11th walkout.

The government and BMA had agreed to independent arbitration in May, but that was put on hold when the election was called. The BMA said the government had yet to make a credible offer.

Junior doctors received a pay rise averaging nearly 9% in the last financial year.

Junior doctors make up nearly half the medical workforce in the NHS and two-thirds of them are BMA members, so NHS England said strikes brought significant disruption,

Chancellor Rachel Reeves is expected to announce in her speech later that the government and the BMA trade union have struck a new pay deal for junior doctors in England.

It’s thought the deal represents a 22.3% pay rise over two years.

The BBC understands the BMA has agreed to put the offer to its members.

If accepted it would end long-running strike action which has led to the cancellation of hundreds of thousands of appointments since March 2023.

More here.

Image source, PA Media

Chancellor Rachel Reeves is speaking in the Commons this afternoon - and we're expecting her to announce some big cuts in public spending worth billions of pounds.

She claims there's a "black hole" in public finances - basically she's arguing there's a gap between how much spending has already been budgeted for, and how much extra it is actually going to cost.

She's set to accuse the Conservatives of "covering up" the shortfalls. The Tories reject this - they say the figures were already available and this is a bid to "con the British public" before raising taxes.

Reeves is expected to announce where the cuts will be made - for example road and rail projects could be axed. And she'll also likely reveal what pay rises public sector workers will get.

As a reminder, leading economists had warned before the election that the sums of both major parties didn't add up and predicted the new government would need to raise taxes, cut spending or drop commitments in order to reduce debt.

Francesca Gillett
Live editor

Welcome to our live coverage, and what a way to start the week as we gear up for a major speech from Chancellor Rachel Reeves this afternoon.

She says the Treasury has completed an audit which shows there is a £20bn "black hole" in the public finances - meaning the gap between how much money the government has coming in and how much it's spending is far wider than they previously thought.

She says the previous government "covered up" the shortfalls. The Tories say the figures were widely available and that Reeves is laying the ground for tax rises.

We'll be here covering the speech, explaining what it means and providing analysis. Our latest story is here, and analysis from our political correspondent is here. Stick with us.