Kemi Badenoch has refused to promise to reverse Rachel Reeves’s National Insurance raid on employers if she became prime minister.
The new Conservative leader said she was more focused on defining her party’s principles rather than “throwing out policies” in the early days of her leadership.
Mrs Badenoch did criticise the wider contents of the Budget as she took aim at the Chancellor’s tax-and-spend approach, predicting that it will make Britain poorer.
National Insurance contributions for employers were increased by 1.2 per cent in Ms Reeves’s Budget last week, which the Treasury said would raise £25 billion.
The tax raid has led to a backlash from businesses and Ms Reeves has admitted they will either have to boost their productivity, accept lower profits or potentially cut wages.
Asked whether she would undo the policy even if it meant less cash for the NHS, Mrs Badenoch told the BBC’s Sunday with Laura Kuenssberg: “I don’t accept the premise of that question.
“No £22bn black hole”
“We didn’t do those things in order to increase the funding for the NHS so it’s not a binary suggestion… What I will say actually is look at what the OBR stated about the Budget, that there’s no £22bn black hole.
“So that’s dishonest, most of the employer increases are going to be passed over in lower wages and higher prices, that’s not good for people.”
When pressed on whether she would oppose or reverse the measure, Mrs Badenoch replied: “The fact is what you’ve just said. I’m the leader of the opposition, I’m not the chancellor of the exchequer. We have very few MPs. We’re not going to be able to oppose anything in terms of getting legislation through.
“What we can do is make the argument about why we think what they’re doing is wrong. And I am making that argument that raising taxes in this way, whether it’s employer NI or elsewhere, is not going to grow our economy and will make all of us poorer.”
Told it was a “binary thing” how she would vote at the Budget, she said: “Talking about Budget votes in my view is a bit inside baseball. “Every opposition votes against every Budget, so voting against the Budget in my view is neither here nor there.”
Mrs Badenoch insisted she would take a different approach as leader of the opposition to that of the new Labour Government, saying she would not rush into policy proposals.
Pledging to “start with principles, not just throwing out policies”, she added she would commit to reversing Labour’s private schools VAT raid because “it is against our principles”.
After beating Robert Jenrick by the tightest margin in any modern-day Tory leadership contest, Mrs Badenoch said her shadow cabinet appointments would unite the party.
She is expected to unveil her top team in the next 48 hours and stressed the importance of uniting the Conservatives after years of internal wrangling. When asked if the appointments would have a broad appeal to the electorate, she said: “I have to bring in people from all parts of the party and it isn’t just about appealing to voters.
“That is important, but it’s also about making sure that we have a shadow cabinet that is meritocratic, that brings in a diversity of experience, geographic diversity, background, the sort of work experience, professional experience that MPs had before they came in.”
Boris Johnson
Asked about a series of scandals during Boris Johnson’s premiership, Mrs Badenoch said he had been a great prime minister but had left some serious issues unresolved.
On her own resignation in July 2022 following the Chris Pincher affair, Mrs Badenoch said: “When ministers were sent out to say things that were not true, that was when I decided that things had gone too far”.
But she contrasted the scandal with partygate, which she said had been “overblown” and argued Mr Johnson’s government should not have issued fines for lockdown breaches.
Mrs Badenoch dismissed suggestions by Nigel Farage, the Reform leader, that she would just offer more of the same as “hilarious”.
She argued that if the Tories could effectively return their values, the public “will start to see that Reform is nothing but a spoiler for the Conservatives”.
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