Labour says it will use the same analysis of the public finances as the Conservatives to set future policy.
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The Labour leader Sir Keir Starmer has said he accepts that there is a £55bn gap in the public finances, a figure provided by the Office for Budget Responsibility (OBR).
Whether or not there is a “black hole” that must be filled with tax rises or spending cuts has been a point of debate.
Sir Keir said he did not dispute the OBR’s calculations.
He said Labour would try to “repair the damage” if it won the next election.
Speaking to the BBC, Sir Keir said: “We will have to face that challenge, and therefore we don’t quarrel with the number that the OBR put out as a target or trying to get the debt down.”
Some, mostly left of centre, economists have suggested that different approaches to calculating government’s finances would result in a much smaller or even no shortfall.
Forecasting economics is notoriously difficult and small changes to the predictions for economic growth or interest rates can make a big difference to how the public finances are expected to look in two or three years’ time.
In addition, if the target to have debt falling as a proportion of economic output is extended beyond the chancellor’s five years, that could also reduce the shortfall between government revenues and expenditure.
These calculations matter as they strongly influence whether the government believes it has scope to spend more on public services such as health and education, or whether it needs to raise taxes.
The Labour leader made clear that he and the shadow chancellor, Rachel Reeves, would use the £55bn fiscal gap as a baseline for their policies in any future manifesto.
This is the first time Sir Keir has publicly accepted the gap, and it will now put pressure on any future Labour government to stick to policies that are consistent with the OBR’s figure.
Sir Keir laid the blame on the current Conservative government for the fiscal gap.
“They’ve done huge damage to our economy, not just in the last 12 weeks, but over the last 12 years,” he said.
He said a Labour government would “make different choices” on spending and tax compared to the Conservative Party.
“The Labour Party under my leadership is the party of sound money,” he added.