Overview
- Rachel Reeves told BBC Radio 5 Live that keeping Labour’s pledge not to raise income tax, National Insurance or VAT would require “deep cuts” to capital spending, calling such choices harmful to productivity.
- The chancellor gave her clearest indication yet that the two‑child limit on Universal Credit and tax credits will be changed or scrapped, saying children should not be “penalised” for being in larger families.
- Keir Starmer said he is determined to drive child poverty down and signalled that a package of measures will be unveiled in the Budget, a stance widely read as paving the way to lift the cap.
- Treasury options reported by multiple outlets include full abolition, raising the limit to three or four children, or a taper, with independent estimates putting the cost of easing or ending the cap in the roughly £2–3.6bn range.
- Labour faces political risks over a possible manifesto U‑turn on taxes, with backbench warnings of a “Nick Clegg moment” and Conservatives demanding clarity on how any welfare expansion would be funded.