Taxes hiked to 'all time high' by Chancellor

... BUT SCRAPPING OF TWO-CHILD BENEFIT CAP IS WELCOMED IN CITY

- By JANET KING

RACHEL Reeves hiked taxes by £26 billion yesterday as she faced forecasts of weaker economic growth, faster inflation and higher unemployment.

The Chancellor's measures, including a freeze on income tax thresholds which will leave 1.7 million people paying more, take the tax burden to an all-time high, according to the Office for Budget Responsibility (OBR).

The tax hikes come in response to downgraded economic forecasts but also increased welfare spending because of the abolition of the two-child benefit cap and the Labour revolt over attempts to curb the benefits bill.

Ms Reeves used some of the tax take to build herself a bigger buffer against her borrowing rules. But she also spent some of it on scrapping the two-child limit for universal credit - a measure to ease child poverty warmly welcomed by Labour MPs but costing £3 billion a year by 2029/30.

Local reaction to this announcement was immediate. Luke Pollard, the Labour MP for Plymouth Sutton and Devonport posted on X: "The two-child benefit cap is gone! This cruel policy hit 1,750 Plymouth families, leaving 2,200 children without support. Scrapping it means fairness for families and fewer kids growing up in poverty. This is a huge win for Plymouth."

And Fred Thomas, the Labour MP for Plymouth Moor View, also posted: "I have always believed that there is no more direct way to lift children out of poverty than by scrapping the Tory's two-child benefit cap.

"That is why I am delighted that the Chancellor has just announced in the Budget that we are doing exactly that.

"It is estimated that there are 1600 families in Plymouth that have been impacted by this cruel policy that unfairly punishes children.

"The announcement today will put thousands of pounds into the pockets of families in our city who need it the most and lift hundreds of thousands of children across the country out of poverty. It is the difference that having a Labour government makes."