Jeremy Hunt accused Labour of lying about the state of the public finances and insisted it will have £39 billion available at the budget.

The shadow chancellor said anger among Labour backbenchers over cuts to the winter fuel allowance shows even they do not believe Rachel Reeves’ claims she has to fill a £22 billion black hole.

Speaking from the main stage at the Conservative conference in Birmingham, he said the backlash over the decision means Labour will avoid welfare reform for fear of fueling anger.

He warned the government will make a “catastrophic” mistake if it hikes up taxes in the budget.

Mr Hunt said: “I think one of the biggest lies we’ve had since Labour came to office is this nonsense about having the worst economic inheritance since the second world war.

“You don’t have to take my word for it, I mean just read this week’s Economist where there’s an article saying that (Rachel Reeves) could have actually not a black hole of £22 billion, but a surplus of £39 billion to play with in the budget.

“The Financial Times did a Freedom of Information request to the Treasury to ask where this fictitious £22 billion number came (from), the reply they got back form the Treasury was we can’t give you the workings because we’re not sure they’re accurate.

“Even the Labour Party don’t believe it, otherwise they wouldn’t be having this debate over the winter fuel allowance.”

He went on to say: “It is going to be, of course, a challenge to bring down the tax burden, we’d started on that journey and I don’t pretend that it doesn’t require difficult decisions, but it’s a very important strategic decision if we want to be a dynamic economy.

“And Conservatives look around the world and we say that the countries that are growing the fastest in North America and Asia tend to be ones with lower tax burdens.

“In the case of the UK, the difficult thing that we need to reform, which would both fund that but is also very good for the economy and indeed for society, is to tackle the problems we have in our welfare state.

“My worry about the last 12 weeks is that Labour have got themselves so badly burnt with the mess they’ve got into over winter fuel allowance that welfare reform will now become untouchable for them,” he added.

The former chancellor said he would have “died” for the legacy that Labour has gained after taking power.

“I mean inflation at 2%, jobs, a succession of Conservative governments that created 800 jobs for every single day they were in office, and on growth, we were the fastest growth in the G7 when Labour took over.

“The International Monetary Fund said that over the next six years we were projected to grow faster than France, Germany, Italy or Japan.

“So frankly that is a legacy I would have died to have when I became chancellor.”

Growth was revised down slightly from April to June to 0.5% from an initial estimate of 0.6%.

Mr Hunt said the GDP figures “once again discredit Labour’s fabricated narrative on the economy”.

“With the Budget only one month away, she must not use it to further damage business confidence with higher regulation and higher taxes,” he said.

Tory leadership contender Tom Tugendhat said Ms Reeves “sees more black holes than Mr Spock during a question and answer session at the conference.

He said: “Rachel Reeves herself told us in June in the Financial Times – I know we all read it daily for its, particularly for the racing columns – she told us herself that there were no secrets, that there were no hidden columns, no hidden books, it’s all public, it’s all in the OBR (Office for Budget Responsibility), you know it’s all there.

“So you can’t claim there’s a black hole. That’s literally what she said but now, now she sees more black holes than Mr Spock.”

Labour’s chairwoman Ellie Reeves said Mr Hunt’s comments showed the “Conservatives have learnt nothing and are incapable of change”.

She added: “It was him and his Tory party that crashed the economy and then left a £22 billion-pound black hole in the nation’s finances.

“Instead of an apology, Jeremy Hunt has criticised every tough decision the Labour government is making to fix their mess. It is like watching an arsonist chastise the fire brigade for putting the fire out.”