𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

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Kemi Badenoch will call on the Government to slash spending and reduce how much it is borrowing, in a major speech ahead of the Budget.

The Conservative leader will urge Andy Burnham and his Chancellor John Healey to “live within our means”, by adopting cuts across Government.

She will also warn ministers to “stop borrowing so much” to fund public works, as Britain’s borrowing costs have soared higher than those of neighbouring countries in Europe.

In the speech in central London, Mrs Badenoch will hit out at the Government despite praise it has received from the International Monetary Fund (IMF) for reducing the deficit in public spending.

“They clearly don’t know the Labour Party like we do,” she is expected to say, before adding: “Labour’s deficit reduction plans to meet their fiscal rules are predicated on making huge cuts to the public sector in the final year of the spending period.”

The Tory leader will cast doubt on the “fictional cuts” which underpins the IMF’s estimates.

She will add: “They are not suddenly going to find some courage to cut spending in the final year of a Parliament right before an election.

“Fictional cuts are not going to cut it. Investors simply aren’t buying it.”

Mrs Badenoch will warn about the high cost of borrowing, as a result of Britain’s gilt yields rising to 6%, their highest level since 1998.

She will say: “That means every pound we borrow is already costing us £2 in less than 12 years. It is true the wars in Ukraine and Iran are pushing these rates up around the world. But they are no more Labour’s fault than they were ours when the war in Ukraine started.

“However, the UK is paying more to borrow than anyone else in the G7. We are paying over a percent more than Greece and Spain. We are paying nearly 2% more than Germany.

“The whole argument on defence spending would go away if our interest rates reduced. This is why we need to live within our means.

“We have to stop borrowing so much. But instead of doing that Labour are taking out loans to pay the interest on our loans.

“Any family or business in that position would know they were sinking, that every attempt to borrow their way out was pulling them deeper.”

Mrs Badenoch will argue that the “right way” to reduce borrowing is to bring spending levels down.

She will signpost the Tories’ plans to make £70 billion in cuts, largely to welfare spending, and by reducing the number of civil servants, and scaling back foreign aid.

The Conservative leader’s speech comes ahead of Mr Healey’s Budget on October 28, which he has already sought to cast as a “tough” package.

Banks could face an increase in the tax on their profits that they face in the fiscal statement, some reports have suggested.

The Liberal Democrats on Monday called on the Government to announce a £14 billion “breathing space” Budget to ease the cost of living, including through a 10p cut to fuel duty, a 10% cut to rail fares, £1 bus fares and a reduction in VAT on kerbside electric vehicle charging to 5%.

A Labour Party spokesperson said: “The Conservatives have zero credibility on the economy. After appointing the architect of the economy-crashing mini-budget as her shadow chancellor, Kemi Badenoch should spare everyone the lecture, stop complaining about the IMF, and start apologising for the mess her party left behind.

“It’s the same old Tories – their sums don’t add up and they haven’t learned a thing.

“This Labour Government has secured £500 billion of private investment for our country, the economy is growing faster than expected, and we’re giving families and business breathing space on the cost of living.”