Labour party conference 2025 live: Rachel Reeves signals plan to go back on ‘no tax rises’ pledge – UK Times

The shadow home secretary has accused the Prime Minister of “smearing people as racist” who want borders better controlled.

“Even yesterday, Keir Starmer was smearing people as racist who wanted to get control of our borders – that tells you a lot about the way Keir Starmer’s mind works”, Chris Philp told Sky News.

Asked if he agrees with Sir Keir’s claim that Reform UK’s immigration policy – including its proposal to scrap indefinite leave to remain – is racist, Mr Philp said: “No, it’s not racist, it’s not racist to want to control our borders – it’s not racist to want to make sure only people who are making a contribution can stay here, it’s completely wrong, completely wrong, for Keir Starmer to use that smear.”

“And in the past, Keir Starmer wrote a book, or an article, when he was a human rights lawyer, when he said that all immigration law had racist overtones or undertones.”

Rachel Reeves has reportedly ruled out hiking taxes on VAT, national insurance and income rates during an interview with Bloomberg, ahead of her party conference speech.

Their political editor Alex Wickham shared on social media: “NEW: Rachel Reeves tells Bloomberg she will not raise the headline rates of income tax, national insurance or VAT at the budget.

“She recommits to the manifesto on the big three and corporation tax as well.

“Dispels speculation this week. Also rules out wealth tax.”

Sir Keir Starmer considers the British people who believe in Reform UK’s immigration policy to be “racist” and this shows “this is a Prime Minister circling the drain”, Zia Yusuf has claimed.

Sir Keir Starmer has accused Nigel Farage’s party of promoting a “racist” policy on immigration after it pledged to scrap settled status for all non-EU migrants, requiring those who have been granted indefinite leave to remain to re-apply under much stricter rules.

Reform UK’s head of policy told ITV’s Good Morning Britain that Sir Keir “is literally the least popular, the most unpopular, Prime Minister on record, according to polls this week.”

Mr Yusuf said: “Look, the reality is that the British people are sick and tired of having their legitimate concerns about immigration being sneered at, being belittled and ultimately being insulted for raising those legitimate concerns.

“What Reform have announced is that migrants must pay their way, speak English and not commit crime, and the fact that Keir Starmer considers that policy – and those very reasonable people, the majority, frankly, of the people in this country who agree with that policy – as racist, says everything about the fact that this is a Prime Minister circling the drain, who is speaking to the activists in his own party.”

In its election manifesto, Labour promised no tax rises on working people, including income tax, VAT or national insurance contributions.

And as speculation has run rife ahead of budgets, the government has always been forced to deny plans to break their manifesto pledges. Typically, they’d say they remained “committed” to those pledges.

But since yesterday, when the prime minister was questioned on the BBC ahead of Labour’s annual conference in Liverpool, some new language has emerged, with Sir Keir saying the manifesto pledges “stand”.

Rachel Reeves repeated the same language on Monday. While the government is still indicating plans to stick to those pledges, the change in language has sparked fevered speculation around a possible VAT rise, partly because “the commitment stands” is a much more passive way of saying the same thing they’ve always been saying, which perhaps might make it easier for them to break the commitment later down the line.

Speculation was only spurred on by the fact that the chancellor broadly confirmed that taxes in general would need to be increased at the budget, saying “the world has changed”.

The chancellor was asked this morning on BBC Radio if she planned to go back on her pledge to business leaders made in November last year after her first Budget that she would not “come back (to them) … with more borrowing or more taxes.”

She replied: “Look, everyone can see that in the last year the world has changed and we are not immune to that change, whether it is wars in Europe and the Middle East, increased barriers to trade because of tariffs coming from the US, whether it’s the global cost of borrowing – we are not immune to those things.”

Following her first Budget, in which bosses’ NI contributions were increased, Ms Reeves told the CBI last November she was “not going to coming back with another load of tax rises or indeed higher borrowing” to fund public services.

She went on: “I have now set the envelope for government spending for the next few years, so I’m not going to need to come back and top that up, either with more borrowing or more taxes.”

Rachel Reeves said she was “determined not to increase those key taxes that working people pay” and that the Labour manifesto “stands”, amid questions about whether she would raise VAT.

Asked whether she would raise VAT, the Chancellor told ITV’s Good Morning Britain: “The manifesto stands and it stands for a reason that working people bore the brunt of the economic mismanagement of the last government and the cost-of-living challenges are still people’s number one biggest concern.

“That’s why I’m determined to make working people better off and why I’m determined not to increase those key taxes that working people pay, and that’s why we made those commitments in the manifesto, and that’s why we stand by them.”

Asked to rule out an increase to VAT, she said: “The manifesto stands and it stands for a reason.”

She repeatedly would not explicitly rule out raising VAT, saying she did not want to go through the manifesto “line by line” before the budget and that “as soon as you answer one question you’ll move on to the next one”.

Rachel Reeves suggested Andy Burnham “risks going the way of Liz Truss” as she warned being Chancellor meant saying “no to good causes” to make sure “the numbers add up”.

Asked whether she agreed with the Prime Minister, who last week appeared to liken Mr Burnham’s economic agenda to that of the former Tory prime minister, she told LBC: “If he’s saying… anybody that says you can just borrow more, I do think that risks going the way of Liz Truss.

“Already one pound in every 10 the Government spends is on financing the debt that was racked up by the previous Conservative government.

“There’s nothing progressive, nothing Labour about that.

“I want to bring that debt down. I want bring that debt down I want to bring those borrowing costs down.

“That means having to make difficult decisions and having to say no. And whoever’s chancellor of the exchequer they need to be able to say no to colleagues.

“They need to be able to say no to good causes because they’ve got to make sure the numbers add up. And with me as Chancellor, they always will.”

Rachel Reeves has kept the door open to cutting the two-child benefit cap, saying she joined the Labour Party because she cares about children.

The chancellor told BBC Radio 4’s Today programme it is “a decision for the Budget”, suggesting an announcement will not come at Labour’s conference to ease pressure from backbenchers, as some had expected.

But she added: “No one needs to tell me about child poverty. I came into this party because I desperately care about children and their life chances.“It’s why we’ve done free school meals, it’s why we’ve done breakfast clubs.

“It’s why we’ve increased the national living wage and the national minimum wage. So I’m a chancellor that cares about child poverty. We will reduce child poverty, but we’ve also got to make sure the numbers add up.”

Rachel Reeves has hit out at Reform’s “racist” immigration policy again, doubling down on Sir Keir Starmer’s allegation.

In a passionate attack on Nigel Farage’s party, she said: “It’s one thing to say that people who are here illegally should be sent home. It is quite another thing to say the person who’s sitting next to you at work today, who was born abroad should be deported.

“It’s quite a different thing to say your next door neighbor who goes to work every day and contributes to our country, sends their kids to the local school, volunteers at the community center because they weren’t born here, they’re going to be deported,

“Those policies are racist, and we will call them out.”