However,she also hinted at being open to abolishing the cap,which campaigners say could lift 350,000 children out of poverty. She said kids ‘should not be penalised because their parents don’t have very much money.’
Reeves argued it was crucial not to let the ‘costs to our economy in allowing child poverty to go unchecked.’
She said: ‘Lots and lots of different reasons why families change shape and size over time,and 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.
‘So,we will take action on child poverty. The last Labour government proudly reduced child poverty and we will reduce child poverty as well.’
Reeves also warned that global instability,fuelled by Donald Trump’s tariffs and the ongoing war in Ukraine,and the sudden downgrade of economic forecasts by the UK watchdog,could force her to make difficult choices.
Reeves told BBC Radio 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.
Sir Keir Starmer’s Labour landslide victory came after the party promised not to hike income tax or VAT (Picture: Getty Images)
‘And as a result,we’ve never managed to get our productivity back to where it was before the financial crisis.
‘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.’
But she cautioned that final decisions ‘haven’t been taken yet.’
The two-child benefit cap was introduced by Prime Minister David Cameron and Chancellor George Osborne in 2013,but it didn’t come into effect until 2017.
It means families cannot claim Universal Credit or Child Tax Credits for more than two children.
The Conservative government said this would ensure ‘people on benefits have to make the same choices as those supporting themselves solely through work’.
But critics,including former PM Gordon Brown and charities like Barnardo’s,argue the policy is a key driver of child poverty.
Think tank the Resolution Foundation has said scrapping the cap could lift more than 470,000 children out of poverty – but would cost around £3.5 billion,a big bill when the Chancellor is struggling to find spare money.
Some reports suggest the government could find a compromise,such as changing the cap to three children or exempting children below a certain age,but campaigners have warned this would lessen the impact.
Cartoon by Guy Venables (Picture: Guy Venables/Metro)
The shadow Chancellor,Sir Mel Stride,accused Reeves of ‘trying to pull the wool over your eyes.’
‘Every time the numbers don’t add up, Reeves blames someone else. But this is about choices – and the Chancellor is making all the wrong choices,’ he said.
Other rumoured tax measures Reeves might be looking at include replacing the stamp duty with a property tax,and a new 3p per mile tax for EVs.
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