UK politics live: ‘I was wrong’ to promise no tax rises, Reeves admits as Badenoch prepares shadow cabinet

Kemi Badenoch promised to tell “hard truths” on the economy as she began her tenure as leader of the Conservatives.

She told the BBC’s Sunday With Laura Kuenssberg: “I think that there are hard truths not just for my party, but for the whole country.

“And that is that as a country we are getting poorer, we are getting older, we are being out-competed by many other competitor countries, and we need to look at how we can reorganise our economy to be fit for the future, not just doing what we always used to.

“And I think that there is an exciting challenge there. I’m very optimistic about what we can do.

“But simply just saying things and making promises to the whole country without knowing how you’re going to deliver them, as we did on Brexit, as we did on net zero, I don’t think is building trust.”

Rachel Reeves is refusing to back down in the face of criticism over her government’s increase to employer national insurance contributions.

The chancellor also said she did not consider or discuss raising the rise before the general election.

Asked if she will think again about increasing employer national insurance contributions amid concerns from GPs, care homes and charities, Ms Reeves told the BBC’s Sunday With Laura Kuenssberg: “I’m not immune to their criticism.

“But we’ve got to raise the money, we’ve got to put our public finances on a firm footing.”

Asked if she considered or discussed raising employer national insurance contributions before Labour’s election win, Ms Reeves replied: “No, this was not something that was on the agenda before the election.”

The Chancellor said the previous Tory government cut employee national insurance contributions on a “false premise” but she thought it would be “wrong” to put that back up.

She said: “It would have been felt immediately in the payslips of working people rather than asking businesses to contribute, and second it would have been a direct breach of our manifesto commitment. So we had to make difficult choices but leadership is about difficult choices.”

Kemi Badenoch has dismissed Nigel Farage’s comments on her election as leader of the Tories as “hilarious”.

Laura Kuenssberg put to Ms Badenoch on her show on Sunday morning that the Reform UK leader “has said you’re more of the same”.

The new Conservative Party leader responded: “Well that’s hilarious.”

When asked to elaborate on what she meant, Ms Badenoch said: “Because I’m not more of the same.”

Kemi Badenoch has pledged to reverse Labour’s controversial private school VAT policy.

The government has committed to end the VAT exemption for independent schools in January.

Speaking on the BBC’s Sunday with Laura Kuenssberg, Ms Badenoch said: “It’s a tax on aspiration, but it won’t raise any money … Taxing education is wrong, it is against our principles, so it’s a very easy thing for me to say we won’t do that.”

Newly elected Conservative leader Kemi Badenoch would not be drawn on whether she would reverse Labour’s national insurance hike.

Chancellor Rachel Reeves announced an increase to employers’ national insurance contributions in her Budget on Wednesday.

Speaking on the BBC’s Sunday with Laura Kuenssberg, Ms Badenoch refused to give an answer on whether she would scrap the policy or not.

Similarly, she would not be drawn on whether she would vote for or againt the Budget.

The Chancellor refused to be drawn on how the Government would respond to a second Donald Trump presidency raising tariffs on all imports to the United States.

Rachel Reeves told Sky News’s Sunday Morning With Trevor Philips: “We are an open, trading economy. The US is our single biggest trading partner, more than £300 billion of trade between our countries.

“That’s beneficial for the UK but it’s also beneficial for the United States, and so we will work with whoever becomes president and make the case for that free and open trade that we believe in.”

She added: “We look at all eventualities of what might happen in the election this week, but we will make the case for free trade, for open trade.”

Rachel Reeves has vowed that the government would “absolutely” keep to Labour’s election promise of not raising key taxes on “working people” through the current parliament.

Ms Reeves told Sky News’s Sunday Morning With Trevor Philips: “Yes, absolutely. It was our manifesto commitment not to increase those three taxes, so income tax, employee national insurance and VAT and we won’t increase those.”

The chancellor added: “It’s an absolute commitment.”

Ms Reeves said the Government has “wiped the slate clean” on the “mismanagement and the chaos” of the previous Tory administration, adding: “It’s now on us.

“We’ve put everything out into the open, we’ve set the spending envelope of this Parliament, we don’t need to come back for more, we’ve done that now, we’ve wiped the slate clean.”

Pressed on whether she will return with more tax rises, Ms Reeves replied: “I’m not going to be able to write five years worth of budgets on this show today, but … there’s no need to come back with another Budget like this, we’ll never need to do that again.

“We’ve now set the spending envelope for the remainder of this Parliament, we don’t need to increase taxes further. We need to do two things now: we need to reform our public services to make sure they work better and we need to grow our economy.”

Reforming council tax would have led to some people “paying significantly more”, Rachel Reeves said as she was charged with “dodging” the issue.

Asked whether her Budget had “dodged” the question of whether to reform council tax by uprating property values, the Chancellor told Sky News’s Sunday Morning With Trevor Philips: “That’s a very complicated and tricky issue to address and it would result in some people paying significantly more in tax.”

Asked what happened to making “tough choices”, she added: “I think we made plenty of tough choices in the Budget this week.”

The chancellor has admitted “I was wrong” to promise no tax rises during the general election campaign, blaming the previous Conservative government for hiding a “black hole” in the country’s finances.

Rachel Reeves was quizzed over the tax hikes she announced in Wednesday’s Budget on this week’s edition of Sunday Morning with Trevor Phillips.

She was shown a clip of her on 11 June, in which she said: “We don’t need higher taxes. What we need is growth and I don’t want to, and I have no plans to increase any taxes beyond those which we have already set out.”

When asked for her response to now having increased the overall tax burden by £40bn, she said: “I was wrong on 11 June. I didn’t know everything, because when I arrived at the Treasury on 5 July, so just under a month after I said those words.

“I was taken into a room by the senior officials at the Treasury, and they set out the huge black hole in the public finances beyond which anybody knew about at the time of the general election, because the previous government hid it from the country, they hid it from parliament and indeed, they hid it from the official independent forecaster.”

The chancellor has defended Wednesday’s Budget as she accused the Tories of a “massive cover-up” when it comes to the public’s finances.

Speaking on Sky News on Sunday morning, she also defended previously voting for two cuts to national insurance after raising the rate this week.

“They were sold on a false promise,” she said. “The money clearly wasn’t available. I supported those cuts to national insurance because they were costed and funded. But now we find out those numbers didn’t add up.”

She added: “There was a massive cover-up.”