Rachel Reeves will launch a fresh crackdown on benefit fraud while fully lifting the two-child limit for universal credit, a move costing £3bn. The chancellor aims to generate an extra £1.2bn in savings by identifying incorrect universal credit payments up to 2031.
The decision to scrap the two-child limit will be welcomed by Labour MPs concerned about child poverty. However, the Conservatives and Reform UK criticised the chancellor for presiding over rising welfare spending alongside tax rises.
The Liberal Democrats warned that freezing tax thresholds until 2030 would drag 9 million earners into higher tax bands. Meanwhile, Green party leader Zack Polanski and Unite general secretary Sharon Graham pressed for a more substantial wealth tax.
Other budget measures include freezing rail fares and prescription fees, reducing levies on electricity bills, introducing a pay-per-mile scheme for electric cars, and applying a surcharge on homes worth over £2m. The government is also freezing income tax thresholds for an extra two years.
Reeves signalled commitment to welfare reform but indicated it would not occur until after reviews by Labour minister Stephen Timms on disability benefits and former cabinet minister Alan Milburn on young people not in employment, both due later next year. Milburn stated there should be 'no no-go areas' for benefits reform.
