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Reeves Sets Cost‑of‑Living Pitch Ahead of 26 November Budget as Tax Rises Loom

To avoid lifting income tax rates, the chancellor is expected to close a £20–30bn gap with threshold freezes plus targeted wealth measures.

Overview

  • Rachel Reeves pledged to “grip the cost of living” in op-eds as the government confirmed a rail fare freeze in England for the first time in 30 years, with some commuters saving more than £300 a year.
  • Reports point to an extension of frozen income tax thresholds to 2030, tighter pension salary‑sacrifice relief, higher taxes on expensive properties, and a pay‑per‑mile charge for electric vehicles.
  • Multiple outlets report the two‑child benefit cap is likely to be scrapped, with estimates suggesting a £3–£3.5bn annual cost, though the Treasury has not confirmed pre‑Budget measures.
  • Analysts put the fiscal shortfall at roughly £20–30bn, citing weaker productivity forecasts, higher borrowing and earlier policy choices, with the IEA warning of a patchwork of smaller tax rises.
  • Political pressure is intensifying as Kemi Badenoch says a threshold freeze breaks Labour’s pledge, Keir Starmer declines to rule out future tax hikes, and the Treasury reiterates it will not comment on speculation.