Is Rachel Reeves really worried about a fiscal black hole?

There is one over-arching question hanging over Rachel Reeves’s speech today, in which she claimed that a £21.9 billion hole has opened up in the current political spending for this financial year: why, if there is such a large ‘black hole’ in the public finances, is there suddenly money available for £9.4 billion worth of above-inflation pay rises for public sector workers?

Preposterously, those pay rises – which Reeves has chosen to make and which were not committed to by the previous government – are included as one of the unfunded spending items (indeed the single biggest spending item) which has contributed to the ‘black hole’. Reeves justifies this leap of logic by claiming that she had no choice but to concede to the conclusions of the pay review bodies, which have recommended pay rises of 5.5 per cent for teachers and other workers. Not only has Reeves rolled over and decided to grant these – supposedly on the basis that public sector unions would call strikes and cost us even more money in the long run – but she has also nodded through a pay rise for junior doctors of over 20 per cent, spread over two years.