Chancellor Rachel Reeves is set to lift the two-child limit on universal credit at a cost of £3bn, while simultaneously launching a crackdown on benefit fraud to generate £1.2bn in savings by 2031. The move aims to head off criticism over rising welfare spending in the upcoming budget.
The Treasury confirmed that the chancellor will extend targeted case reviews to identify incorrect universal credit payments, vowing that every pound of taxpayers' money should be spent with care. A Treasury source said the government 'will never tolerate fraud, error or waste in the welfare system.'
Conservative leader Kemi Badenoch criticised the plans, claiming Labour would raise taxes on working people to fund more welfare. The Liberal Democrats warned that freezing income tax thresholds until 2030 would drag 9 million earners into higher tax bands, accusing the government of milking hard-earned cash.
Other budget measures include freezing rail fares and prescription fees, introducing a pay-per-mile scheme for electric cars, and a surcharge on homes worth over £2m. Reeves has also signalled further welfare reforms, but these are unlikely until reviews by Stephen Timms and Alan Milburn report next year.
The chancellor faces pressure from the left as well, with the Green Party and Unite calling for a more substantial wealth tax. Reeves emphasised that her budget, aimed at filling a £20bn fiscal hole, will focus on helping with the cost of living and targeting inflation, while confirming a rise in state pensions under the triple lock.
