‘Weak’ Rachel Reeves humiliated by Tory leader’s brutal putdown: ‘Running out of time!’ | Politics | News

Kemi Badenoch said Britain will have “watched in horror” as Rachel Reeves sought to blame everyone else for her upcoming tax raid. She said time is rapidly running out for the beleaguered Chancellor as she desperately grapples to fill a colossal £30billion black hole in the nation’s finances.

Writing exclusively in the Daily Express, the Conservative leader accuses Ms Reeves of being “weak” and lacking the “courage” to rebuild the country’s crumbling economy. Her withering onslaught came after the Chancellor teed up a manifesto-busting tax raid, ominously warning “we will all have to contribute” to getting the country back on track. In an unprecedented speech in Downing Street ahead of her Budget in 21 days, Ms Reeves said she was now prepared to put the national interest ahead of political expediency.

She is understood to be considering increasing income tax by 1p or 2p to help balance the books

This is despite a pledge in Labour’s manifesto not to increase income tax, National Insurance or VAT.

It is more than half a century since a Chancellor chose to put up the basic rate of income tax – that was Labour’s Denis Healey, who delivered his Budget on April 15, 1975.

And it also comes after her first Budget 12 months ago, in which she launched a £40billion tax raid to fund a public spending spree and vowed not to “come back for more”.

But rather than take responsibility for the grim situation, she offered a laundry list of excuses, including Brexit, Tory austerity, Donald Trump, Covid and the Ukraine war.

The Conservatives have urged Sir Keir Starmer to sack his Chancellor if she breaks Labour’s tax pledges to the country.

Mrs Badenoch said: “Britain watched in horror as our Chancellor tried to blame everyone and everything except herself for why she’s gearing up to raise our taxes again.

“When Rachel Reeves blames the global economy for our anaemic growth, it’s because she’s run out of ideas.

“When she blames the last government, it’s because she’s run out of courage.

“And when she blames everyone else, it’s because she’s running out of time.

“Britain cannot be rebuilt by a weak Chancellor who has already given up on it.”

Economists have estimated Ms Reeves will have to find billions to plug a black hole caused by about-turns on welfare spending cuts and increased debt interest costs.

The key line about tax in Labour’s 2024 election manifesto read: “Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher, or additional rates of income tax, or VAT.”

Breaching this manifesto pledge would be a huge political gamble.

In 1993, Lord Lamont increased taxes to stabilise the economy, just a year after the Conservatives had promised not to do so. He later conceded it contributed to the Tories losing the 1997 election.

Sir Nick Clegg also inflicted severe electoral damage to the Liberal Democrats during the coalition government by breaking a manifesto pledge when he voted for a tuition fees rise.

Asked about the pledge, Ms Reeves said: “As I take my decisions on both tax and spend, I will do what is necessary to protect families from high inflation and interest rates, to protect our public services from a return to austerity and to ensure that the economy that we hand down to future generations is secure with debt under control.

“If we are to build the future of Britain together, we will all have to contribute to that effort.

“Each of us must do our bit for the security of our country and the brightness of its future.”

Her remarks triggered a nervous reaction from markets, with the FTSE 100 and pound falling sharply – although both eased throughout the day.

Standing in front of a podium with the slogan “strong foundations, secure future”, Ms Reeves appeared to blame “tariffs, unstable borrowing costs, inflation and long-term productivity” for what lies ahead.

“The continual threat of tariffs has dragged on global confidence, deterring business investment and dampening growth,” she said.

“Inflation has been too slow to come down, as supply chains continue to be volatile, meaning the costs of everyday essentials remain too high.

“And the cost of government borrowing has increased around the world, a shift that Britain, with our high levels of debt left by the previous government, has been particularly exposed to.”

The Resolution Foundation, which has close links to Labour and was previously run by Treasury minister Torsten Bell, has said avoiding changes to VAT, NI or income tax “would do more harm than good”.

It recommends hiking income tax as the “best option” for raising cash, but suggested it should be offset by a 2p cut to employee National Insurance, which would “raise £6billion overall while protecting most workers from this tax rise”.

Extending the freeze in personal tax thresholds for two more years beyond April 2028 would also raise £7.5billion, the think tank suggested.

The National Institute of Economic and Social Research (NIESR) says the Chancellor needs to raise income tax by 2p to help balance the books.

Pensioners have warned they must not be made the scapegoat for the Chancellor’s economic failures.

Dennis Reed, director of over-60s campaign group Silver Voices, said: “It is clear that the Chancellor is going to break her pledge not to raise income tax, but the pain is likely to be targeted at pensioners.

“This would be seen as a direct and deliberate attack on the living standards of older people, the large majority of whom already pay some income tax.”

Mitchell Palmer, economist of the Adam Smith Institute said: “Reeves has once again refused to take responsibility for her Government’s high-spending, anti-growth agenda, while preparing the public for yet more damaging tax rises in the coming Budget.”

Ms Reeves’s appearance came days after it was revealed that she broke the law by failing to obtain the licence needed to rent out her family home.

She is also looking to extend the six-year freeze on tax thresholds, dragging millions more into higher tax bands – despite previously warning the move would break Labour’s manifesto pledge.

Treasury officials are said to have been ordered to find ways of getting more money out of everyone with incomes of more than £45,000 a year.

The Chancellor is said to be looking at dramatically hiking council tax for the top bands, which could affect over a million families.

That could mean an eye-watering rise from £3,800 to £7,600 for residents of a band G household in England – and from £4,560 a year to £9,120 for those in band H.