Chancellor Rachel Reeves indicated the government will scrap the cruel two-child benefit limit at the Budget on November 26 to lift hundreds of thousands out of poverty
Rachel Reeves has suggested it will not be possible to stick to Labour’s manifesto promises on tax without “deep cuts” in spending.
It is the clearest sign yet the Chancellor is preparing to break the party’s vow not to raise income tax, VAT, or national insurance. She also indicated the government will scrap the cruel two-child benefit limit at the Budget on November 26 to lift hundreds of thousands out of kids poverty.
Ms Reeves said it was not right that a “child is penalised because they are in a bigger family”. But the Chancellor insisted on Monday no final decisions have been made on tax and spending – with just a fortnight to go.
Ms Reeves told BBC 5 Live: “I will set out the choices in the Budget. It would, of course be possible to stick with the manifesto commitments, but that would require things like deep cuts in capital spending and the reason why our productivity and our growth has been so poor these last few years is because governments have always taken the easy option to cut investment – in rail and road projects, in energy projects, in digital infrastructure.”
She added: “So we’ve always got choices to make, and what I promised during the election campaign was to bring stability back to our economy, and what I can promise now is I will always do what I think is right for our country.”
Pressed on the two-child benefit limit – a Tory-era policy blamed for trapping kids in poverty – Ms Reeves said child poverty should not be tolerated.
There have been reports Keir Starmer and Ms Reeves have been looking at watering down the policy – rather than abolishing it full. But the Chancellor said: “There are plenty of reasons why people make decisions to have three, four children, but then find themselves in difficult times.
“You also have things like adoption. Or, or foster caring. Lots and lots of different reasons why families change shape and size, over time. I don’t think that it’s right that a child is penalised because they are in a bigger family., through no fault of their own.
“And so we will take action on child poverty. The last Labour government, a proudly reduced child poverty. And we will reduce child poverty as well.”