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Conservative leader Kemi Badenoch has cautioned that the UK risks financial collapse if the Labour Party raises taxes without also reducing welfare expenditures. She accused Chancellor Rachel Reeves of planning a “stealth tax bombshell” in the upcoming Budget to fund increased welfare payments, attributing this to her failure to cut the benefits bill. Badenoch warned, “If she comes back for more taxes without having serious cuts in public spending, especially on welfare, then she is going to ruin our economy.”
Labour’s anticipated Budget moves include scrapping the two-child benefit cap, which currently limits benefits for families with more than two children, as part of efforts to reduce child poverty. Additionally, Reeves is expected to freeze income tax thresholds, a measure likely to increase tax liabilities for earners as wages rise. Badenoch emphasized that the Conservatives would resist such changes “every single step of the way.” Following her speech outlining Conservative economic policies, she claimed Labour’s expected repeal of the two-child cap means the chancellor would have to find an additional £8.5 billion. “If Labour do scrap the two-child benefit cap, the future Conservative government would bring it back,” she stated, describing the cap as a fairness mechanism ensuring benefit recipients face the same family planning decisions as others.
Badenoch reiterated her call for Reeves to be dismissed if the chancellor increases taxes, referencing a previous promise made not to introduce further tax hikes after last year’s Budget. She told reporters, “If she puts up tax she should get the axe.” Framing spending cuts as a moral imperative, Badenoch argued that avoiding such measures would burden future generations with debt. She also offered to provide Archbishop of Canterbury Dame Sarah Mullally—a former critic of the two-child benefit cap—with briefing materials to clarify the Conservative position. Badenoch warned, “If we keep this spending going I am afraid we are going to go bankrupt,” adding, “There isn’t going to be any money for people in need.”
At the same time, Reform UK leader Nigel Farage, who supports ending the two-child benefit cap, delivered a separate speech proposing up to £25 billion in annual savings through spending cuts. Badenoch criticized Farage’s plan to terminate universal credit payments for EU citizens living in the UK, labeling his suggestion that the UK could renegotiate this arrangement with the EU as “completely ridiculous.” On BBC Radio 5, she described these benefits as “hard-fought reciprocal rights” that also apply to Britons abroad, warning that negotiating them could risk “re-opening Brexit.” In response, Labour Party chair Anna Turley condemned both Reform UK and the Conservatives, stating, “their plans don’t add up and would be a disaster for Britain,” and citing Conservative proposals for £47 billion in spending cuts that, she said, would impact hospitals, schools, and police services. Meanwhile, Liberal Democrat Treasury spokesperson Daisy Cooper accused the Conservatives of imposing years of “stealth taxes and broken promises,” criticizing both major parties for seeking to penalize the public rather than promoting economic growth through improved trade relations with the EU
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