SHADOW chancellor Rachel Reeves has refused to rule out a Labour government keeping the Bedroom Tax and the two-child cap on benefits.

The former Bank of England economist said it was a “sad truth” that if the party came to power it would not be able to undo all the welfare policies it had opposed in parliament.

She was asked repeatedly if the tax, which reduces the amount of rent tenants can claim Housing Benefit for if they are deemed to have too many bedrooms, was staying in an interview with BBC Radio 4. 

In Scotland, the impact of the tax is mitigated by the Holyrood government's Discretionary Housing Payments.

Reeves explained the full plans around benefits and taxation would be set out near the next General Election, but made it clear that many Tory policies would not be scrapped.

She said it was a "sad truth" that Labour would not be able to reverse everything "because of the dire economic inheritance" the party will face should it come to power. 

The shadow chancellor continued to blame a lack of money as she was also challenged over whether her party would commit to extending free school meals in England.

We previously told how economists were left fuming after another member of the shadow cabinet, Lucy Powell, made the claim that a future Labour government would not be able to “afford” ending the two-child cap on benefits.

The party’s leader Keir Starmer has sparked outrage among allies and opponents when he told the BBC he would not reverse the two-child cap if he became prime minister.

Asked about the two-child cap on BBC Breakfast, Reeves said: “I’ve said that everything we’ve put forward in our manifesto will be fully costed and fully funded.

“We’ve set out some of the different choices that we would make but there are many, many things and you know I could list many of them that I haven’t supported over the last 13 years.

“But we’re not going to be able to reverse all of them because of the terrible economic inheritance that we will have. And I think people understand that.”

Reeves continued to cite that the lack of growth in the economy coupled with high inflation and interest rate levels behind the reason for Labour’s stance.

She was also asked about her stance on free school meals in England, with Keir Starmer also refusing to commit to this policy.

Reeves said: “Again, it’s one of those things that I just can’t see where the money is going to come from.

READ MORE: Two-child benefit cap hit 80,000 Scottish kids in 12 months

“Free school meals for the children who need it most but I’m not going to be able to magic money out of thing air and the most important thing is that the sums add up.”

Labour’s claims over a lack of money have left economists baffled. Regarding Powell’s comments on Tuesday, Professor Richard Murphy said: “It staggers me that someone supposedly capable of being a minister in the next government can say something as stupid as ‘there is no money left’.

“Doesn’t she know that one of the most fundamental jobs of government is to create the money we need? It can never run out, ever.”

In Scotland, an estimated 279,000 pupils in Scotland benefit from the SNP government’s universal free school meals policy which has been rolled out for all pupils in primaries one to five.

According to analysis, the policy saves families around £400 to £440 a year on average per eligible child.

Commenting, the party’s education spokesperson Carol Monaghan said:"By abandoning its manifesto pledge on free school meals, the pro-Brexit Labour Party will cost families hundreds of pounds a year - and make it more likely that children will go hungry.

READ MORE: Rishi Sunak welcomes Labour's 'newfound support' for Tory benefit cap

"The SNP government has shown that introducing free school meals is possible - saving families in Scotland an average of £400 per child a year. This progressive policy supports the wellbeing of all children, helps ensure effective learning and helps families during a cost of living crisis.

"With every Tory policy they copy, and every progressive policy they ditch, the pro-Brexit Labour Party is showing Westminster is incapable of delivering the change Scotland needs.

"The SNP is the only party offering real change with independence - and real help with the cost of living. At the next election, voting SNP is the only way to secure independence and get rid of damaging Westminster governments for good."