Chancellor refuses to rule out VAT rise in Autumn Budget as Reeves vows to make 'working people better off'

Speaking with Nick Ferrari at Breakfast, Rachel Reeves insisted she wants to make "working people better off' but refused to be drawn on whether her party would be forced to break a key policy pledge.

Under Labour's current manifesto, the party has ruled out VAT rises - a pledge that has become increasingly uncertain as the cash-strapped government scrambles to raise funds and boost the UK economy.

"We made those commitments in our manifesto and those manifesto commitments stand," Rachel Reeves insisted - a response that saw Nick highlight the fact that policies can stand but later fall.

"They stand," the Chancellor reiterated from the party conference in Liverpool on Monday, but refused to confirm whether a future hike could be on the cards.

"If you look at, at my record at the budget last year, lots of people said we're going to have to break manifesto commitments," she continued. "I didn't."

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"We raised the money that was needed to fill that black hole in the public finances and to invest in our National Health Service and other public services without increasing the taxes that working people pay," she continued.

"That's what I did last year. And those manifesto commitments to make working people better off? They stand.

"We made those commitments because in the last Parliament, it was the worst parliament on record for living standards and working people bore the brunt of that economic mismanagement.

"And so we made those commitments not to increase the key taxes that working people pay because we want working people to be better off."

"And that's why, you know, we are continuing with. Standing by whatever words you want to use with those commitments, because I am determined that at the end of this Parliament, working people are better off."

It comes as the Institute for Government insisted that Labour’s "unrealistic" approach to tax has left the Chancellor reaching for ‘piecemeal changes’.

Rachel Reeves should “reject the path of least resistance” and consider rowing back on her “rash” tax commitments at the Budget, a leading think tank has said.

Early on Monday, Ms Reeves defended her failure to rule out the rise, insisting: “Look, I’m not going to, two months ahead of the Budget, go through it line-by-line."

It comes as Labour prepares to unveil plans for its "youth guarantee" which sees all young people on Universal Credit offered work after 18 months on benefits is set to be announced by Chancellor Rachel Reeves during a speech at Labour's conference.

Ms Reeves will announce the new plan intended to tackle the number of young people who are not earning or learning later today at the Labour Party conference, with sanctions expected for those who turn down the roles.

She will say that Britain must be built on the principles of doing "our duty for each other" and "hard work matched by fair reward" in a speech to Labour's annual conference.

The guarantee, which will be overseen by Work and Pensions Secretary Pat McFadden, forms part of a pledge of "nothing less than the abolition of long-term youth unemployment", Ms Reeves will say.

She added: "The last Parliament, they weren't already in this Parliament, wages have increased more in the first 10 months than they did in the first 10 years of the previous."

Referring to real wage increases, the Chancellor's response saw Nick highlight that food inflation has also seen supermarket prices increase by 5.1% during that period.

Insisting shoppers "don't feel that when they go to Aldi", the Chancellor reiterated her desire to boost the UK finances.

It comes as a host of cabinet ministers took to the lectern at the party's annual conference.

Reeve's colleague, recently appointed Home Secretary Shabana Mahmood, is poised to unveil plans that would see migrants who want to stay in the UK forced to learn English, have a clean criminal record and volunteer in their community in order to remain.

In her speech on Monday at Labour's annual conference, Shabana Mahmood will set out new conditions for those seeking indefinite leave to remain (ILR) status in Britain.

The changes comes after Nigel Farage's Reform UK said they would make migrants reapply for new visas rather than offering them ILR after 5 years in the UK.