Labour accused of 'grossly exaggerating' black hole in fresh Budget attack: 'Economic growth has fallen off a cliff!'

Redwood pointed out that before Labour took power, Britain had been "the fastest growing G7 economy for the first half of the year".

He argued that most of the alleged financial overrun was due to Labour's own decisions on pay awards, which were "considerably more than the previous Government had been willing to give in order to settle some strikes".

The criticism comes as Labour defends its controversial National Insurance changes against mounting opposition from major retailers.

In his critique, Redwood highlighted specific areas of Government spending he deemed wasteful, particularly targeting the £19billion allocated for carbon capture and storage.

"Waste of money. It will make our energy and high energy-using businesses even less competitive than they are already because it's all extra cost. It's not an investment," he said.

The Conservative MP also raised concerns about declining public sector productivity since 2019.

He acknowledged Labour's aim to return to pre-2019 productivity levels, suggesting this could generate £30billion in savings.

"I'm just saying let's get back to doing what we were doing in 2019; that shouldn't be asking too much," Redwood stated.

He criticised what he called "top-heavy organisations" in the public sector, claiming there were "too many people bossing people around and writing reports to each other and not enough people serving the public."

Redwood suggested alternative approaches to Labour's tax increases, pointing to potential savings in Bank of England operations.

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He criticised the Bank's handling of bonds, claiming it would lose more than the £22billion alleged deficit this year alone.

"The Bank of England is uniquely losing much more and sending the bill to the taxpayer which the ECB can't do," he said.

According to Redwood, the Bank is projected to lose £240billion between 2022 and the final run-off of its bonds.

He urged Rachel Reeves to examine the Bank's accounts, questioning their bond strategy and mounting losses.

Redwood argued that by addressing these financial inefficiencies and cutting wasteful expenditure, the Government could avoid tax increases.

"If you stop those kinds of expenditures you don't need all this extra tax. Indeed you could have some tax cuts," he concluded.

Labour's budget has faced significant pushback from major retailers over its National Insurance changes.

More than 70 leading retailers, including Tesco, Asda and Sainsbury's, have warned of potential price increases and job losses in an open letter to Chancellor Rachel Reeves.

Sir Keir Starmer has defended the measures, declaring he is "absolutely confident" in the Chancellor's financial plans.

"The reason we got into such a mess over the last 14 years is because the last Government refused to take a single difficult decision," Starmer said.