Overview
- The Chancellor said sticking to Labour’s 2024 tax promises would mean deep cuts to capital spending, strongly indicating those pledges may be dropped in the 26 November Budget.
- She signalled action on the two-child benefit cap, arguing children should not be penalised for larger families, with Whitehall reported to be weighing full abolition against cheaper tweaks.
- Charities and think tanks say scrapping the cap could lift around 350,000 children out of poverty, with cost estimates ranging from roughly £2bn to £3.5bn by 2029/30.
- A City AM/Freshwater poll found 66% of voters say Reeves should resign if she raises income tax, as senior Labour figures warn of a severe backlash over breaking manifesto commitments.
- Reports point to options under consideration including a 2p income tax rise paired with targeted NI cuts and limits on pension salary sacrifice and dividend reliefs, with analysts warning some higher earners and state pensioners could face very high effective rates if rates increase.