Chancellor Rachel Reeves will give her Budget on Wednesday.
Rachel Reeves will give her Budget on Wednesday (Image: Getty)
Rachel Reeves will unveil £15billion of extra benefits spending in Wednesday’s Budget, it has been reported. The Chancellor is expected to fund the move by a tax raid on the middle classes.
The Chancellor will end the two-child benefit cap in its entirety and increase benefit payments by nearly 4%, while financing her U-turn on winter fuel cuts and welfare reform.
Approximately nine million people are expected to be affected by the freezing of income tax thresholds, resulting in higher rates of income tax, a move critics argue breaks Labour’s election manifesto pledges.
The yearly cost of the four policies amounts to £15 billion, which totals an extra £18 billion to the benefits bill when added to last year’s budget announcements, according to The Telegraph.
Meanwhile, Ms Reeves will extend a crackdown on benefit fraud in a bid to raise £1.2 billion as she seeks to balance the books in the Budget this week.
She will be extending targeted case reviews, which root out inaccuracies in universal credit claims, with the aim of bringing in an extra £1.2 billion by March 2031.
She could also hit more than 100,000 high-value properties with a levy that applies to those worth more than £2 million and could raise £400-£450 million, The Times reported.
Some 2.4 million properties in the top three council tax bands would be revalued to determine which would be subject to the surcharge.
People will be able to defer the cost until they die or move house, thereby avoiding the need to sell up, according to the newspaper.
Ms Reeves is grappling with weak economic growth, persistent inflation and an expected downgrade to official productivity forecasts as she prepares her statement.
After scrapping plans to raise income tax, she is expected to look to a “smorgasbord” of smaller measures to bring in cash.
