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Reeves Prepares Budget Focused on Living Costs, Tax Threshold Freezes and Targeted Levies

She is preparing threshold freezes alongside targeted taxes to plug a £20–30bn gap, according to briefings before Wednesday’s statement.

Overview

  • Chancellor Rachel Reeves has ruled out a basic rate income tax rise and is expected to extend freezes on income tax thresholds, with the IFS estimating roughly £8bn a year raised by 2029–30.
  • Multiple outlets report she plans to scrap the two‑child benefit cap at an annual cost of more than £3bn, a move seen as addressing backbench pressure within Labour.
  • The government says the Budget will include a £1.5bn electric‑vehicle package, with about £1.3bn to boost purchase grants and £200m for charge‑point rollout, subject to announcement on 26 November.
  • EV drivers are widely expected to face a new pay‑per‑mile charge to replace lost fuel duty revenue, pairing incentives for adoption with a longer‑term revenue recoup mechanism.
  • Further revenue measures under consideration include capping tax‑advantaged pension salary‑sacrifice contributions at around £2,000 and higher charges on high‑value properties, while rail fares in England have been frozen.