Rachel Reeves has implied that adhering to Labour’s tax pledges from their manifesto may require significant spending cuts. This signals a potential departure from the party’s commitment not to increase income tax, VAT, or national insurance. Reeves also hinted at the government’s intention to eliminate the controversial two-child benefit limit during the upcoming Budget on November 26 to reduce child poverty.

Reeves emphasized the unfairness of penalizing children due to their family size, stating that maintaining manifesto commitments would necessitate substantial cuts in capital spending. She highlighted the need to prioritize economic stability and make decisions that benefit the country in the long term.

Regarding the two-child benefit limit, Reeves emphasized the urgency of addressing child poverty, suggesting a possible revision of the policy rather than complete abolition. The Chancellor defended the policy by acknowledging the various reasons families may expand or change in size over time, emphasizing the importance of not penalizing children in larger families.

Reeves and Keir Starmer have reportedly discussed potential adjustments to the policy. The Chancellor reiterated the government’s commitment to tackling child poverty, drawing parallels to past Labour administrations’ efforts in reducing this issue.