Rachel Reeves has admitted she was wrong to say there would be “no need to increase taxes further” before the election.

When asked if she had been honest with voters, the Chancellor said she had not known about the “huge black hole in public finances” left by the previous government when she spoke out.

“I was wrong on June 11," she said. "I didn’t know everything.” 

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Ms Reeves raises taxes by £40 billion last week, with the biggest increase coming from employer national insurance contributions.

Speaking on Sky’s Trevor Phillips on Sunday programme, Ms Reeves said: “There’s no need to come back with another budget like this. We’ll never need to do that again.

“We’ve now set the spending envelope for the remainder of this parliament, we don’t need to increase taxes further. We need to do two things now: we need to reform our public services to make sure they work better and we need to grow our economy.”

She also gave an “absolute commitment” that the government would stick to its manifesto pledge for five years that there would be no tax increases on “working people”, saying Labour had “wiped the slate clean” after the Tories’ “mismanagement”.

Ms Reeves said: “It’s now on us. We’ve put everything out into the open, we’ve set the spending envelope of this parliament, we don’t need to come back for more, we’ve done that now, we’ve wiped the slate clean.”

When it was pointed out on the BBC’s Laura Kuenssberg programme that Labour had said they would not raise national insurance in their manifesto, the Chancellor said the manifesto had only promised not to hike taxes on working people, not employers.  

Asked if she will think again about increasing employer national insurance contributions amid concerns from GPs, care homes and charities, Ms Reeves told the BBC’s Sunday With Laura Kuenssberg: “I’m not immune to their criticism.

“But we’ve got to raise the money, we’ve got to put our public finances on a firm footing.”

Asked if she considered or discussed raising employer national insurance contributions before Labour’s election win, Ms Reeves replied: “No, this was not something that was on the agenda before the election.”

The Chancellor said the previous Tory government cut employee national insurance contributions on a “false premise” but she thought it would be “wrong” to put that back up.

She said: “It would have been felt immediately in the payslips of working people rather than asking businesses to contribute, and second it would have been a direct breach of our manifesto commitment. So we had to make difficult choices but leadership is about difficult choices.”

Reducing taxes does not mean cutting public services, Kemi Badenoch insisted as she said the previous government had borrowed too much and raised taxes too high.

She told the BBC’s Sunday With Laura Kuenssberg: “If we start from the assumption that we can just tax and borrow our way through, we will keep getting poorer, and that is what has been happening.

“And we were a part of that, so when you ask what we did wrong, these were some of the things that I think that we got wrong.

“I think the tax burden was too high under the Conservatives. That doesn’t mean that we have to cut public services, it means that we have to look at how we are delivering public services, and a lot of what government does is not even public services.”

(Image: Jeff Overs/BBC/PA Wire)

Appearing on the programme later, the new Tory leader, Kemi Badenoch, said there were "hard truths" about the economy that needed to be faced by the country.

“And that is that as a country we are getting poorer, we are getting older, we are being out-competed by many other competitor countries, and we need to look at how we can reorganise our economy to be fit for the future, not just doing what we always used to.

“And I think that there is an exciting challenge there. I’m very optimistic about what we can do.

“But simply just saying things and making promises to the whole country without knowing how you’re going to deliver them, as we did on Brexit, as we did on net zero, I don’t think is building trust.”

Ms Badenoch also said she would reverse Labour’s decision to impose VAT on private school fees.

“And the reason why is it is a tax on aspiration, but it won’t raise any money.”

When it was suggested this would involve taking money from state schools, she said: “At the moment, certainly up until Labour came in, we didn’t have this tax, so it’s not taking money away from state schools.

“This is not what’s happening, and we also see there is a knock-on effect with state schools having to take more pupils.

“But the bottom line is that that is a tax on aspiration. Taxing education is wrong, it is against our principles, so yes that is the sort of thing that I can very easily say we would not do that.”