Rachel Reeves says Budget ‘wiped slate clear’ and vows no extra borrowing or tax hikes

Rachel Reeves has insisted the Budget had “wiped the slate clean”, meaning the Government won’t have to do another on the same scale “ever again”.

The Chancellor has been forced to defend tax hikes which, she argues, are vital to tackle a £22billion black hole in the public finances.

She risked a frosty reception as she took question at business group the CBI’s annual conference. It follows widespread criticism of the Budget’s announcement that the rate of employers’ national insurance will jump, and the wage threshold on which it will be paid will fall. Companies have lined-up to warn it could lead to prices rises and potential job losses.

But Ms Reeves told the CBI audience she faced the same challenges business leaders did when they take over struggling firms. “I do recognise the challenges that businesses face but had to make sure that the sums added up,” she said. “We have drawn a line under the fiction peddled by the previous government.”

She added: “I am clear: I am not coming back with more borrowing or more taxes. That is why at this Budget we did wipe the slate clean. As a result, we won’t have to do a Budget like this ever again.”

Ms Reeves also said: “If I hadn’t have done that, I’m afraid we would have had a return to the instability and uncertainty that has plagued our economy for far too long.” She said she was being “honest and level with people about the scale of the challenges we face”.

Ms Reeves also addressed criticism of inefficiency in the public service, suggesting more shake-ups to save money were on the way. “There has not been enough reform these past few years,” she said.

“We are still running public services in the way you ran your businesses a decade or so again. We have a lot to learn from the best innovation in the private sector to reform and improve our public services and get better value for money for the taxpayer.”