Rachel Reeves will seek to close £40bn Whitehall spending gap with range of potential measures

Labour has two aims in the budget: to make tax rises and spending cuts that close a spending gap in day-to-day Whitehall budgets of about £40bn, and to increase the funds available for investment.

According to government sources, the £40bn includes the £22bn shortfall left behind by the previous Conservative administration and an extra top-up for areas such as schools, hospitals and defence.