Cachella Smith
Live reporter

Just over two weeks out from the autumn Budget, the chancellor has spoken with BBC Radio 5 Live giving the latest government position on what we might expect on 26 November.

Speaking on a day when the BBC itself is coming under criticism, Reeves first underlined that she has confidence in the organisation, while stressing that lessons do need to be learnt.

Turning then to her own role, she told the BBC the upcoming Budget will focus on the cost of living and getting the national debt and waiting lists down.

She pointed to challenging circumstances, citing specifically global trade disruption, as she repeated she will be looking at both taxes and spending. She did not however directly answer questions on whether taxes would be going up.

The final points of the Budget have not yet been finalised, she explained, but drew uncertainty over whether she would stick to Labour's manifesto commitments, saying that to abide by them would require "things like deep cuts in capital spending".

We will be closing our live coverage shortly - for a reminder of the latest Budget details you can head to our explainer.

How Labour may try to sell a manifesto-breaking tax risepublished at 16:11 GMT 10 November

16:11 GMT 10 November

Harry Farley
Political correspondent

For many Labour MPs, scrapping the two-child benefit cap is fundamental to what they think a Labour government should be doing.

Now the chancellor has strongly signalled that, after previously resisting the idea, she will do exactly that in the Budget.

“A child should not be penalised because their parents don’t have very much money,” she told BBC 5Live, adding child poverty “should not be tolerated".

The Treasury had been expected to change the two-child limit but there were suggestions it could be replaced with a tapering system, rather than being entirely scrapped.

Rachel Reeves’s words indicate she will go ahead with fully removing the policy.

“There are plenty of reasons why people make decisions to have three, four children but then find themselves in difficult times,” she said. “There are lots of different reasons why families change shape and size over time.

"I don’t think it’s right that a child is penalised because they’re in a bigger family through no fault of their own. So we will take action on child poverty.”

The calculation in the Treasury is that if they are to break their promises on tax, as we mentioned earlier, it has to count for something beyond balancing the books.

It gives Labour MPs something to cheer about if they have to try and sell a manifesto-breaking tax rise.

Image source, Getty Images

Labour's 2024 election manifesto pledged not to raise the basic, higher, or additional rates of income tax, or National Insurance, under a vow not to increase taxes for "working people".

It also promised not to raise Value Added Tax (VAT), a sales tax, although the manifesto did not specify whether this applied to the rates, or which products are subject to the charge.

The manifesto pledges not to raise these taxes - the biggest revenue-raising options available to the Treasury - has considerably reduced Reeves's room for manoeuvre ahead of the 26 November Budget.

It is more than 50 years since a chancellor chose to put up the basic rate of income tax.

Economists say Reeves may need tax rises totalling as much as £30bn to meet her financial rules by a comfortable margin.

Political correspondent Harry Farley says today's interview was the clearest sign yet that Labour is set to break on of its key manifesto promises.

Clear suggestion that limit on benefits linked to family size will be scrappedpublished at 15:43 GMT 10 November

15:43 GMT 10 November

Chris Mason
Political editor

In the chancellor’s interview with Matt, Rachel Reeves suggested, in plain language, that any limit on benefits connected to the size of your family will soon be scrapped.

So that would mean the removal of the current two-child benefit cap, but also that there would be no higher restriction with any connection to the number of children - so not a three-child cap, or tapering the benefits in some way.

Her key quote was: “I don’t think that it’s right that any child is penalised because they are in a bigger family through no fault of their own.”

Balancing day to day spending is not Reeves's main constraintpublished at 15:36 GMT 10 November

15:36 GMT 10 November

Faisal Islam
Economics editor

There was a clear signal on the two-child limit being abolished, and the clearest signal yet that manifesto promises would be broken.

Neither were definitive confirmation, however, there is still a fortnight to juggle options.

There was something quite nerdy but important about her notion that the only alternative to breaking manifesto tax pledges would be deep cuts in capital spending.

It reveals that the main fiscal rule, to balance day to day spending, is not the main constraint because that excludes capital spending entirely.

Instead the rule that the national debt, or rather public sector net financial liabilities (a measure of debt) must fall in 2029/30, as a percentage of GDP, appears to be the constraint.

By implication, her refusal to cut capital spending in order to protect a significant rise in investment, is what is leading to pressure to raise taxes further.

The chancellor has reiterated that she will "do what is right" for the country when she delivers her Budget on 26 November. Let's recap on some of the key points she discussed with the BBC's Matt Chorley on Radio 5 Live:

• Budget will focus on cost of living: Reeves accepted that some voters feel the government is falling short, pointing to a challenging economic backdrop, but said her Budget will focus on reducing the cost of living, debt and NHS waiting lists. She called these "the most important priorities for the country"
• Reeves is looking at taxes and spending: Tax rises are widely expected at the upcoming Budget, but Reeves was clear that she will be looking at "both" taxes and spending
• Manifesto promise: Asked about sticking with Labour's manifesto pledge not to raise key taxes for working people, Reeves said “it would be possible" to stick with the manifesto commitments “but that would require deep cuts to capital spending”
• Two-child benefit cap: Reeves hinted at changes to the two-child benefit cap, saying that child poverty "should not be tolerated" and that "we will take action"

Clearest sign yet that Labour could break its manifesto pledgepublished at 15:08 GMT 10 November

15:08 GMT 10 November

Harry Farley
Political correspondent

That was the clearest sign yet that Labour is set to break one of the key promises it made in its election manifesto.

“It would be possible," Rachel Reeves told BBC Radio 5Live, to stick with the manifesto commitments. “But that would require deep cuts to capital spending.”

Capital spending is on long-term projects or assets.

She went on: “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.

"And as a result, we've never managed to get our productivity back to where it was before the financial crisis.”

That seems a pretty clear indication that the chancellor is hurtling towards breaking the Labour manifesto commitment not to raise income tax, National Insurance, or VAT.

Her argument is that continued investment in public services, in roads, infrastructure etc, is worth breaking one of the big promises Labour made about not raising taxes.

Whether you - the public - agree, and whether Labour MPs agree, will be the key factor in determining the chancellor’s future.

There is speculation the government could change the two-child benefit cap in November’s Budget, potentially replacing it with an alternative such as a tapered system.

The cap, introduced by the Conservatives, prevents households on universal or child tax credit from receiving payments for a third or subsequent child born after April 2017.

Reeves says that child poverty "should not be tolerated" and cites measures the government has put in place, including school breakfast clubs.

Chorley then asks whether scrapping the two-child benefit cap would cost a lot in higher taxes, with Reeves responding by using the example of homelessness and the human and economic costs associated with it, such as temporary accommodation, healthcare and social costs.

Without directly addressing her plans for the two-child benefit cap, she says that a child "should not be penalised" because their parents do not have much money - "we will take action on child poverty", she says.

That wraps up Reeve's interview, stay with us for analysis and reaction.

Chorley now challenges Reeves on the Labour Party's election manifesto. He suggests it is now clear that manifesto promises will be broken at the upcoming Budget on 26 November.

He also asks Reeves what she would say to Labour's deputy leader Lucy Powell, who has argued the government should follow through on its manifesto promises.

Reeves says Powell has been clear that she "stands alongside" Reeves and the decisions she will have to make at the Budget.

Chorley challenges Reeves, saying there is a question of trust if Labour's central manifesto promise on tax lasts barely a year.

Reeves refuses to be drawn in, saying: "We haven't made final decisions yet on the Budget."

She adds: "It would, of course be possible to stick with the manifesto commitments, but that would require things like deep cuts in capital spending."

Next, Chorley questions Reeves about Labour's general election pledge to not raise key taxes and asks why Reeves felt Labour had to make that promise.

Reeves says: "The truth is what we inherited is significantly worse - last year I had to fix the black hole in public finances."

Chorley then presses Reeves on the point of a manifesto "if it doesn't last a day beyond you being elected into office".

Reeves says she will set out the choices in the Budget later this month.

"I will do what is right for our country," the chancellor continues. "Sometimes that means not always the easy decisions but the decisions that I think are in the national interest."

Reeves is asked about the "necessary choices" she has hinted at making in the upcoming Budget.

The chancellor responds that she has been "really clear" she will be "looking at" taxes and spending.

She cites a few things which will influence the Budget decisions, including "conflicts" and "disruptions" with trade.

She adds that growth has not been as strong as she would like.

Pushed on whether taxes will be going up, she repeats again she will be looking at "both" taxes and spending, adding that fairness and growing the economy are her guiding principles.

The BBC's Matt Chorley now asks Reeves whether being in government has been harder than she expected.

"An awful lot of challenges" have been thrown our way, Reeves says, pointing to geopolitical challenges and global trade disruption. "All of those have a bearing on our economy at home," she adds.

Reeves says these factors have "put pressure" on borrowing, spending and taxation.

Chorley asks Reeves whether there is anything she has done which has hit growth.

Reeves says she accepts that every decision she makes has an impact, but asks people to consider the alternative.

"Yes, I did increase taxes on the wealthiest and businesses", she says, but asks: "What's the counterfactual?"

Presenter Matt Chorley quotes a recent YouGov poll which suggests only 10% of voters think she is doing a good job, and asks Reeves why she thinks this is the case.

Reeves acknowledges there are challenging circumstances and that "change is taking a while to come through", as she points to interest rates and the cost of living being still too high.

"People feel these cost of living pressures in their every day lives and they want those to be addressed," Reeves says. "We have got a Budget later this month that Budget will be focused on the cost of living, getting the debt down and getting NHS waiting lists down because I think those are the most important priorities for the country."

Reeves says her dream job as a chancellor has not turned into a nightmare, as she expresses a determination to turn the country around and act in the interests in ordinary people.

"It is important when it is a challenging moment," Reeves adds.

Reeves's 5 Live interview comes on a day when the BBC has come under fire following the resignations of Tim Davie and head of news Deborah Turness after a leaked memo criticised a number of issues in different sections of the organisation's coverage.

Asked for her reaction to the resignations, Reeves says she has confidence in the BBC, adding "it is respected the world over".

She adds that it is right that the organisation is held to "high standards" and on this occasion, has "fallen short" as she says that lessons do need to be learnt.

Asked about potential legal action from Trump, the chancellor says it is not her place to comment or give advice on that.

Rachel Reeves is now up, speaking to BBC Radio 5 Live's Matt Chorley. Click watch live at the top of the page to follow along.

We are expecting the chancellor to set the scene ahead of her Budget on 26 November. Tax hikes are widely anticipated after she failed to rule them out in last week's pre-Budget speech.

Stick with us as we bring you the key lines.

Last Tuesday, Tory leader Kemi Badenoch was among politicians who responded to Rachel Reeves' pre-Budget speech.

Badenoch said "the chancellor's speech was one long waffle bomb, a laundry list of excuses. She blamed everybody else for her own choices, her own decisions, her own failures."

We also heard from Daisy Cooper, Treasury spokesperson for the Liberal Democrats who said Reeves's speech was "pointless".

"This Budget will be a bitter pill to swallow," she said, adding that "the government seems to have run out of excuses".

We may get some clues on how Reeves plans to balance the bookspublished at 14:20 GMT 10 November

14:20 GMT 10 November

Faisal Islam
Economics editor

Image source, Getty Images

Today is an important day in the Budget timetable - the chancellor of the Exchequer receives back the first draft of the Office for Budget Responsibility (OBR) forecast, based on a set of confidential tax measures she communicated last week.

While speculation is rife, this is a draft and subject to change.

Nonetheless, when my colleague Matt Chorley sits down with Rachel Reeves, she will know what tax rises she is currently planning on going with.

I have long assumed that the favoured move would be to raise income tax and cut National Insurance at the same time. This would centre the central tax rise, not on pay packets, but on savings, pensions and rental income - income tax thresholds seem likely to be frozen too.

Reeves may have to reflect on bad news, if as has happened in the past, the Budget maths gap to fulfil her borrowing rules is not fully closed by planned measures.

The chancellor has had some better news, with fixed mortgage rates starting to fall again on expectations of renewed Bank of England rate cuts, starting next month.

Consumer confidence for the under 50s is starting to recover notably. The key economic growth figure for Q3, from July to September, is released on Thursday.

A previous chancellor once told me how the key “headroom” number moved £50bn in just one month, in his favour, almost apologising for the earlier gloomy tone. The chancellor’s dilemma is whether the tax rise speculation, and her own actual Budget medicine, may weigh on fragile British consumers and businesses.

We may get some clues on the balancing act live from Number 11.

We won't know for sure exactly what changes the government plans to make to taxes or to public spending until the Budget on 26 November. Here are some of the possibilities:

Income Tax and National Insurance (NI)

The government could extend a freeze on income tax and NI thresholds, which is due to end in 2028. As salaries rise over time, this pulls more people above the income threshold at which they either start paying tax and NI or qualify for higher tax rates.

The Resolution Foundation think tank - which has close links to some members of the government - has recommended cutting 2p from the employee NI rate, while adding the same amount to income tax. Reeves has signaled that she could focus on wealthy individuals, arguing "those with the broadest shoulders should pay their fair share".

Welfare

Pressure, including from MPs within the Labour party, has increased to scrap the two-child limit for benefit uplifts. The current policy means households on universal credit get extra support for the first two, but no additional help for subsequent children.

Isa reform

Earlier this year, the chancellor ruled out any immediate reform to cash Isas (Individual Savings Accounts). However, the FT has since reported, external that she may cut the cash Isa limit from £20,000 to £10,000.

• There are further details in our explainer

Matt Chorley
Presenter, BBC Radio 5 Live

The scarlet walls of the State Room in Number 11 Downing Street make a dramatic backdrop for my interview with Rachel Reeves this afternoon on BBC Radio 5 Live.

She is not the first chancellor to come under pressure - if these walls could talk they would tell tales of battles over tax and spending which stretch back in time, even further than when a chancellor first lived here in the early 1800s.

Reeves has vowed to take the "necessary choices" to balance the books.

Does that mean tax rises? Higher income tax for everyone? What about the Labour manifesto promising not to do that? What about the two-child benefit cap? What about the demands of Labour MPs, the markets and you, the voters?

I will try to get answers to all of this today as the clock turns down to the budget on 26 November.

Image source, Reuters

Good afternoon. Rachel Reeves is set to speak to BBC Radio 5 Live's Matt Chorley ahead of her 26 November Budget.

There is growing expectation the chancellor will raise taxes after she used an unusual Downing Street speech earlier this month to highlight economic obstacles facing the UK.

Reeves refused to rule out a U-turn on Labour's general election manifesto pledge not to hike income tax, VAT or National Insurance and instead pledged a "Budget for growth with fairness at its heart" aimed at bringing down NHS waiting lists, the national debt and the cost of living.

We'll bring you live updates during her interview, as well as political analysis and reaction. Stay tuned.