Kemi Badenoch accuses Rachel Reeves of leaving households £1,700 worse off

Kemi Badenoch will accuse Rachel Reeves of presiding over a "tax doom loop" leaving working households £1,700 worse off. The Conservative leader will warn that the Chancellor's policies are making the cost of living worse and that Britons face punishing tax rises in the autumn Budget.

Mrs Badenoch will use a major speech on Tuesday to deliver a warning that the deficit - the difference between government revenue and spending - is set to double from £16.3billion to more than £32billion over the next five years. And she will challenge Sir Keir Starmer to work with her party to bring down the UK's bloated £300billion welfare bill "in the national interest". The Tory leader will reiterate her pledge to recommit to the two-child benefit cap - the only party to do so - but argue that Britain must live within its means and stop saddling future generations with debt.

Mrs Badenoch is expected to say: "Today I'm making the Prime Minister a serious offer, because the Conservative Party will always act in the national interest.

"If he is serious about cutting spending, and really bringing down the welfare bill, like he tried to claim to be last week, we will help him in the national interest."

Earlier this year, Sir Keir faced humiliation after Labour MPs rebelled against his welfare bill.

Urging the Prime Minister to "change his approach", Mrs Badenoch will add: "So, if we're to cut spending and avoid more punishing tax rises at the Budget, crushing business confidence and pushing up inflation, Keir Starmer has to change his approach.

"Sit down with us. Let's agree a way to bring welfare spending down.

"And I will offer him the support of the Conservative Party.

"This isn't a blank cheque.

"It's an offer to work together in the national interest and to find common ground and a serious plan.

"I hope the Prime Minister will put country before party and agree to work across the aisle on this.

"He and Rachel Reeves have a choice.

"They can hike up taxes, to borrow more.

"Or for once, they can do the right thing."

Mrs Badenoch is looking to turn her sights on Labour's mishandling of the economy as she attempts to overturn dismal poll ratings for the Conservatives.

In her speech, she will say that without a strong economy, there can be no strong defence, strong NHS or strong schools, warning that Labour are putting all three at risk with their reckless borrowing.

Her intervention follows Tory demands to scrap the war on private enterprise - Angela Rayner's union charter, the Unemployment Rights Bill - described by the five largest business organisations as a "recipe for damaging, not raising, living standards".

That legislation is expected to cost businesses more than £5billion a year, hitting growth and jobs at the worst possible time.

The Conservatives are calling for the Government to reset its relationship with business and back Britain's makers and wealth creators to grow the economy.

It comes as new Work and Pensions Secretary Pat McFadden vowed to boost employment opportunities for young people.

In a call with staff at DWP, he said it was a "concern" that the number of NEETs (not in education, employment, or training) is growing.

"Because the truth is, if you don't get somebody on the right path or a productive path at that age, it can be very difficult to change the course later on," he said. "So I want that to be an early area of priority for me."